Brunswick to keep Sea Ray boats

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Sea Ray stays with Brunswick but sport yacht production to be wound down.

Brunswick Corporation has called an end to the sale process for its Sea Ray business, announcing that it will seek to revitalise the brand to capitalise on growth opportunities in its sport boat and cruiser product categories. The company announced late last year that it was putting the whole Sea Ray business up for sale.

While the company is retaining control of the Sea Ray brand, it will be stopping production of Sea Ray sport yacht and yacht models, resulting in the wind down of yacht production in the third quarter of 2018.

“Over the last several months, we have engaged in a thorough sale process for the Sea Ray business, which we believed would generate the highest value for our shareholders,” said Mark Schwabero, Brunswick chairman and CEO. “Although there was interest in the business, the offers we received did not reflect an appropriate value for this premium brand, and did not meet our expectations.

“The lower value was largely due to the persistently weak financial performance of the yacht product category, which complicated and obscured the value of the remainder of Sea Ray.

“As the sale process neared conclusion, we started to evaluate other strategic options beyond our original plan to sell the Sea Ray business in its entirety

“Based on that re-assessment, we have concluded that our best opportunity to maximise value is to retain the Sea Ray brand and refocus the business on the sport boat and cruiser product portfolio. As part of the transformation of Sea Ray, we will discontinue sport yacht and yacht models and begin an orderly wind down of yacht production.

“These combined actions will create a revitalised Sea Ray that will benefit from continuing synergy with our broader marine portfolio - and with targeted ongoing investment we believe will offer increasingly attractive profitability and cash flow returns.

“We believe that this is the best solution to generate value for our dealers and shareholders now and in the future," said Schwabero.

Up to 825 jobs will be lost as a result of shutting down sport yacht and yacht production at Brunswick's Sykes Creek and Palm Coast, Florida, facilities. Palm Coast is targeted for closure as soon as practical in 2018, while a portion of Sykes Creek will continue to operate to support customer service and warranty obligations.

“We appreciate the dedication and commitment our employees and the communities that support our operations and will help them through this transition,” said Schwabero.

Going forward, Brunswick will report results of Sea Ray on a GAAP basis in continuing operations, rather than the previous classification as discontinued operations in recent financial reports.

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