Patrick Industries, Inc. (NASDAQ: PATK) has announced its definitive agreement to acquire Sportech, LLC for approximately $315 million. Sportech, based in Elk River, Minnesota, is a leading designer and manufacturer of high-value, complex component solutions to powersports OEMs, adjacent market OEMs, and the aftermarket.
The acquisition of Sportech is expected to be immediately accretive to profit margins and net income per share. Andy Nemeth, Chief Executive Officer of Patrick Industries, expressed enthusiasm about the acquisition, stating, "Sportech provides meaningful scale as a supplier of key and synergistic solutions to powersports OEMs, enabling us to continue to accelerate our momentum in the attractive outdoor enthusiast space, where we have industry-leading platforms in the RV and marine markets."
Jim Glomstad, Chief Executive Officer of Sportech, also conveyed excitement about the acquisition, commenting, "The team at Sportech and I are excited to join the Patrick family of incredible brands and leverage their foundation of resources and support as we continue to implement our strategy to 'discover, design, develop and deliver' for our valued customers."
The acquisition is expected to close on or before January 24, 2024, subject to customary closing conditions and regulatory approval.
Following the acquisition, Sportech will continue its operations as a wholly owned subsidiary of Patrick under the Sportech name and within its existing facilities.
Patrick Industries will host a conference call on Thursday, January 11, 2024, at 8:30 a.m. Eastern Time to discuss the acquisition. Participants on the call will include Andy Nemeth, Chief Executive Officer, Kip Ellis, Chief Operating Officer, and Matt Filer, Interim Chief Financial Officer.
Patrick Industries, Inc., a leading component solutions provider for the RV, marine, powersports, and housing markets, was founded in 1959 and is based in Elkhart, Indiana, employing approximately 10,000 team members throughout the United States.
The company's full 8-K submission is available here.
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $2,263 | $2,337 | $2,487 | $4,078 | $4,882 | $3,639 |
| Revenue Growth | n/a | 3.27% | 6.4% | 64.0% | 19.71% | -25.46% |
| Operating Margins | 8% | 2% | 7% | 9% | 10% | 7% |
| Net Margins | 5% | 4% | 4% | 6% | 7% | 4% |
| Net Income (MM) | $120 | $90 | $97 | $225 | $328 | $152 |
| Net Interest Expense (MM) | -$26 | -$9 | -$43 | -$58 | -$61 | -$69 |
| Depreciation & Amort. (MM) | $55 | $93 | $73 | $105 | $131 | $142 |
| Earnings Per Share | $4.93 | $3.85 | $4.2 | $9.63 | $13.41 | $6.96 |
| EPS Growth | n/a | -21.91% | 9.09% | 129.29% | 39.25% | -48.1% |
| Diluted Shares (MM) | 24 | 23 | 23 | 23 | 24 | 22 |
| Free Cash Flow (MM) | $166 | $200 | $128 | $187 | $332 | $412 |
| Capital Expenditures (MM) | $34 | $44 | $32 | $65 | $80 | $64 |
| Current Ratio | 2.44 | 2.76 | 2.32 | 2.25 | 2.48 | 2.42 |
Patrick Industries has growing revenues and increasing reinvestment in the business and decent operating margins with a stable trend. Additionally, the company's financial statements display positive EPS growth and irregular cash flows. However, the firm has a highly leveraged balance sheet.
