#820 - July 17, 2014 A Business-to-Business Report[/size][/font][/font][/color] |
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| Brunswick to Sell Retail Bowling Business to Bowlmor AMF LAKE FOREST, Ill., July 17 - Brunswick Corporation today announced it has agreed to sell its Retail Bowling business to Bowlmor AMF for $270 million, contingent upon customary closing procedures. Brunswick anticipates completing this transaction in approximately 90 days. In connection with its decision to sell its bowling centers, Brunswick also announced its intention to divest its Bowling Products business. Brunswick is targeting to complete that sales process by the end of 2014, during which time the company will continue to operate the business. Brunswick will retain its legacy and namesake Billiards business. Brunswick stated that it had found the Bowlmor AMF offer, which was unsolicited, to be a unique opportunity to transfer ownership of this business at an attractive valuation. "Brunswick Retail Bowling has long been a solid contributor to our Company, and last year had approximately $187 million in sales. After careful consideration, however, we concluded that this transaction is in the best interests of our shareholders and the Retail Bowling business," explained Brunswick Chairman and CEO Dustan E. McCoy. "The bowling industry has been evolving as center counts decline and the customer mix shifts from predominately league bowling to casual bowlers seeking an entertainment-oriented experience. For Brunswick to drive growth in this business, it would take continual development of new entertainment concepts and significant additional investment to implement these new concepts at new properties or to convert existing centers. We believe directing investments into select portions of our core Marine operations as well as our Fitness business provide better opportunities for greater returns. In 2013, the Marine and Fitness businesses together accounted for 92 percent of Brunswick's net revenues," McCoy continued. "Conversely, Bowlmor AMF's primary strategic objective is to invest in and grow its retail bowling business, which includes proven entertainment concepts in certain of its centers. With the addition of the Brunswick locations, Bowlmor AMF will increase its center count to 343 in North America, and, will add some of the most dedicated and talented people in retail bowling. "Finally, due to our exit from the Retail Bowling business, combined with similar market dynamics, we have retained Lazard to seek a suitable buyer for our Bowling Products business," McCoy concluded. Brunswick stated its current plan assumes that the eventual purchaser will retain both the manufacturing operations and the talented workforce of Bowling Products. During the sale process, Bowling Products will maintain ongoing operations and conduct business-as-usual, while keeping its employees, distribution network and customer base informed of the sale's progress. As a result of the Company's announced sale of its Retail Bowling business and its intention to sell its Bowling Products business, beginning with the third quarter of 2014, Brunswick will report the results of these businesses, which were previously reported in the Bowling & Billiards segment, as discontinued operations. In addition, the results of the Billiards business will be included in the Company's Fitness segment. As a result of these divestitures and associated discontinued operations treatment, Brunswick estimates the dilution to EPS from continuing operations, on both a GAAP and as adjusted basis, to be approximately $0.20 per diluted share for the full-year 2014. Further, Brunswick estimates that for 2014, the free cash flow from continuing operations will be lower by $35 million to $40 million. The Company continues to believe it can achieve the long-term financial targets included in its three-year plan. Therefore, the Company maintains its original base case target of $3.00 to $3.40 earnings per diluted share in 2016. "Going forward, we anticipate net proceeds from both these divestitures and associated actions, which reflect our current estimates for taxes (http://r20.rs6.net/tn.jsp?f=001ZCQ-7Wmc8DPSlxm69TR1JfZiKllzZ9g6NNnsA2CYyurou-fcXW8Ie71dajz1IknUKjDEmEW2DAoKYpibkNAJGQI458XQ1KqmORlf1or18FaYccqZpppJY-5BTAfq38PMGR1bkhoSyZsOW3NbRHkUpy7hXLhe_jhB81IZxc4Ai2GtzNLEV0nu8A7UXRit3OKGVR_mpcDXd7h5yqEeJgtGEg==&c=rJ7Ww9G1TjOeXbcqZlvpuERd8MCj3myW5JULN2eodkfX8lfgIiBjag==&ch=FDaIoaQcicsh9tUBIi9JvgooJ2SkmYgtuOfkbUKd3A3TfOI9kHi1xw==) and liabilities to be paid, to approximate $270 million to $290 million," McCoy explained. "We believe our best opportunity to increase shareholder value is to use these net proceeds to strengthen our Marine and Fitness segments. Further, we plan to consider the following: increasing the quarterly dividend, accelerating contributions to the Company's underfunded pension plans as part of our de-risking strategy, and establishing a share repurchase program. "Our highest priority will be to target investment opportunities in segments such as marine parts and accessories along with those in Fitness. Brunswick already has completed one such investment by acquiring Whale, a leading marine parts and accessories provider, and we anticipate additional acquisition activity in this area." |
For those who want some insight to AMF/Bowlmor's CEO Tom Shannon, here is the very short version:
And for those with a real attention span, the long version:
Seems like a good opportunity for Nike to get into the bowling equipment business.
so does this mean brunswick is done period? no more balls being made or products?
the 30 second version. . .
What the CEO of Bowlmor thinks of league bowlers: http://youtu.be/DTuMd6O3rMc
The 11th Frame has a nice analysis of the purchase:
http://www.11thframe.com/news/article/6758
well that totally sucks....guess I'm going to have to bite the bullet and pick up a few Brunswick balls I was looking at before it's to lateso does this mean brunswick is done period? no more balls being made or products?
Thats how I understood it, they are getting out of bowling completely.
The sad thing is that this just craps all over any excitement over Junior Golds pulling a ridiculous number of 2770 entrants.
Only bright spot is, like Richgels said, its gives the independent proprietor a huge chance. Problem is, how many proprietors understand/want to deal with the opportunity that still lies with the sport of bowling.
The sad thing is that this just craps all over any excitement over Junior Golds pulling a ridiculous number of 2770 entrants.
Only bright spot is, like Richgels said, its gives the independent proprietor a huge chance. Problem is, how many proprietors understand/want to deal with the opportunity that still lies with the sport of bowling.
We definitely don't know the answer to that, but to be honest, the proprietors that would deal with it would do it simply for the love of the sport. It's pretty much public knowledge that Shannon is only in this to make money and if it takes destroying the sport to do it, so be it. But those that don't cater to his model (read: league/tournament bowlers) will want/need someplace to go, especially if they view quitting as not an option. That's where the independents will come in and keep that going.
Local story: Here in Sacramento, there are already 2 - 3 alleys that have Bowlmor's business model. Last year, one of those realized what was going on, and while keeping that same entertainment model (they also offer Laser Tag), offered to bring in every league that wanted to get out of Bowlmor houses, because they realized the importance of leagues and repeat customers. It's caused them to up and rethink their game. Any other independents may do the same and like Riggs said, may find themselves in a better position.
BL.
The sad thing is that this just craps all over any excitement over Junior Golds pulling a ridiculous number of 2770 entrants.
Only bright spot is, like Richgels said, its gives the independent proprietor a huge chance. Problem is, how many proprietors understand/want to deal with the opportunity that still lies with the sport of bowling.
We definitely don't know the answer to that, but to be honest, the proprietors that would deal with it would do it simply for the love of the sport. It's pretty much public knowledge that Shannon is only in this to make money and if it takes destroying the sport to do it, so be it. But those that don't cater to his model (read: league/tournament bowlers) will want/need someplace to go, especially if they view quitting as not an option. That's where the independents will come in and keep that going.
Local story: Here in Sacramento, there are already 2 - 3 alleys that have Bowlmor's business model. Last year, one of those realized what was going on, and while keeping that same entertainment model (they also offer Laser Tag), offered to bring in every league that wanted to get out of Bowlmor houses, because they realized the importance of leagues and repeat customers. It's caused them to up and rethink their game. Any other independents may do the same and like Riggs said, may find themselves in a better position.
BL.
The sad thing is that this just craps all over any excitement over Junior Golds pulling a ridiculous number of 2770 entrants.
Only bright spot is, like Richgels said, its gives the independent proprietor a huge chance. Problem is, how many proprietors understand/want to deal with the opportunity that still lies with the sport of bowling.
We definitely don't know the answer to that, but to be honest, the proprietors that would deal with it would do it simply for the love of the sport. It's pretty much public knowledge that Shannon is only in this to make money and if it takes destroying the sport to do it, so be it. But those that don't cater to his model (read: league/tournament bowlers) will want/need someplace to go, especially if they view quitting as not an option. That's where the independents will come in and keep that going.
Local story: Here in Sacramento, there are already 2 - 3 alleys that have Bowlmor's business model. Last year, one of those realized what was going on, and while keeping that same entertainment model (they also offer Laser Tag), offered to bring in every league that wanted to get out of Bowlmor houses, because they realized the importance of leagues and repeat customers. It's caused them to up and rethink their game. Any other independents may do the same and like Riggs said, may find themselves in a better position.
BL.
Is that Strikes in Elk Grove?
The sad thing is that this just craps all over any excitement over Junior Golds pulling a ridiculous number of 2770 entrants.
Only bright spot is, like Richgels said, its gives the independent proprietor a huge chance. Problem is, how many proprietors understand/want to deal with the opportunity that still lies with the sport of bowling.
We definitely don't know the answer to that, but to be honest, the proprietors that would deal with it would do it simply for the love of the sport. It's pretty much public knowledge that Shannon is only in this to make money and if it takes destroying the sport to do it, so be it. But those that don't cater to his model (read: league/tournament bowlers) will want/need someplace to go, especially if they view quitting as not an option. That's where the independents will come in and keep that going.
Local story: Here in Sacramento, there are already 2 - 3 alleys that have Bowlmor's business model. Last year, one of those realized what was going on, and while keeping that same entertainment model (they also offer Laser Tag), offered to bring in every league that wanted to get out of Bowlmor houses, because they realized the importance of leagues and repeat customers. It's caused them to up and rethink their game. Any other independents may do the same and like Riggs said, may find themselves in a better position.
BL.
Is that Strikes in Elk Grove?
I was actually thinking Country Club. Though Strikes in Elk Grove and Rocklin were the other two I was thinking of.
BL.
Bill @ Storm might be licking his chops over this...
Bill @ Storm might be licking his chops over this...
Perhaps it is just me......but it seems like they could do some type of promo or sale or SOMETHING that would market to Brunswick equipment users and get them switched over. JMO.
I was told they are being sold and there is a buyer for the bowling products side of the business!
The information I've been told is to continue business as usual. Don't cut back on R & D or product development. We had a great 1st half of the year. The bowling division is just for sale and they have some suitors. Our brand, Radical, is a positive part of the consumer products dividion of Brunswick.
Full speed ahead. The glass is half full.
more spin. . .
http://youtu.be/CfJAeXdMUWc (http://youtu.be/CfJAeXdMUWc)
more spin. . .
http://youtube/CfJAeXdMUWc
more spin. . .
http://youtube/CfJAeXdMUWc
Thanks for the link.
Brunswick Fair Lawn Lanes is a very well run establishment which has been part of the community for 40 + years. You will find courteous staff, a clean environment, and good equipment including overhead monitors that are actually easy to operate. The management has provided a nice mix of "entertainment" and league bowling for the "serious" bowler. There is "cosmic bowling" on weekends and on most summer nights together with an arcade area.
This house ain't broke, so it does not need a fix. Mr. Shannon can best serve the staff at Brunswick Fair Lawn Lanes and the public by leaving the establishment alone.
Says that they're going to keep the Brunswick name and run them separately.
Possibly run Brunswick as the competitive side and AMF as cosmic land?
This would be a very welcome idea to a lot of bowlers, and center employees. It makes some sense. I have to think that Mr. Shannon knows what is said about him and his company. I am sure they know that many serious bowlers are upset with the changes they have made at centers. This may give them an opportunity to appease these folk.
Obviously, the Bowlmor concept works though, otherwise they wouldn't have had the ability to make this deal. Even if most of the cash comes from loans, the lending establishments must see it as profitable in order to fund this venture. We will have to wait and see I guess.Says that they're going to keep the Brunswick name and run them separately.
Possibly run Brunswick as the competitive side and AMF as cosmic land?
Jorge, good advice. On the day after the Brunswick announcement, I spoke with the manager (Judy) of Brunswick Fair Lawn Lanes. A Bowlmor representative told her that there would be "no changes for a year" and that there probably would be "no changes" at all.
I am not buying the "no changes" statement, but we have to wait and see. If Bowlmor carefully evaluates each establishment and implements its plan on a house-by-house basis, well run facilities like Fair Lawn Lanes and Carolier Lanes should be OK. If not, Charlest, several other posters on Ball Reviews, and I will be league bowling in different places in the future.
This house ain't broke, so it does not need a fix. Mr. Shannon can best serve the staff at Brunswick Fair Lawn Lanes and the publicby leaving the establishmentbowling alone.
What continues to crack me up is the mentality that Bowl/AMFWick is hurting bowling when the amount of centers owned is less than 10% of centers in North America....bowling is NOT broken...it's the mentality of certain bowlers that make it seem that it is