Owner of boatmaker Sea Ray, with Vonore factory and Knoxville office, floats sale

Brunswick Corp. is going to sell boatmaker Sea Ray, which has a major factory in Vonore and a main office in Knoxville, the company announced this week.

“The sale of Sea Ray will include our Sykes Creek and Palm Coast facilities in Florida, our Vonore manufacturing plant in Tellico, Tennessee, and our Dandridge and Greeneville (Tenn.) support facilities that are largely dedicated to, and are currently supporting Sea Ray production,” Brunswick Director of Media Relations and Corporate Communications Daniel Kubera said via email. “Sea Ray PDE (which is in Florida) and the brand’s international operations also will be included in the sale.”

Sea Ray is one of 15 brands in Brunswick Boat Group, but it’s the only one for sale, he said.

No immediate changes are planned for the plant in Tellico West Industrial Park, which employs about 600 of Sea Ray’s 1,500 U.S. workers, Kubera said.

“The specific and ultimate impact on any plants and facilities will depend the prospective buyer and an evaluation of their needs and capabilities,” he said.

Brunswick will evaluate the sale’s impact on its BBG Logistics facility on Island River Drive, which supports Sea Ray, Kubera said.

“It is likely that there will be modifications to the size and structure of those support groups, but it is premature to speculate on the specific impact until we identify a prospective buyer and understand their needs,” he said.

The company doesn’t have a buyer lined up; financial services firm Lazard will manage the sale, which is expected to be complete in the first half of 2018, Kubera said.

Until then, it’s “business as usual,” as Sea Ray continues to support its dealers and customers, build boats and develop new products, he said.

“This decision was made after careful consideration, and reflects the evolving contribution that the Sea Ray brand has made to our marine portfolio,” Brunswick Chairman and CEO Mark Schwabero said in the announcement. “We believe that the Sea Ray business, through its leading brand and exciting product line, offers attractive value creation opportunities to a new owner.”

Sea Ray announced in June it had expanded its Tellico plant and was adding workers, to increase production of its 40-foot SLX 400 model, dubbed “The Entertainer.”

Sea Ray, founded in Michigan in 1959, built the Tellico factory in 1985. A year later Brunswick bought the company for $350 million, on the heels of buying boatmaker Bayliner for $425 million, according to BoatTEST.com.

At that time Sea Ray sold 28,000 boats a year, but today only sells about a tenth of that, BoatTEST.com reported. In 1986 Sea Ray had 4,500 workers, but now employs a third of that number.

Annual sales, pegged at $400 million in 1986, dropped to $380 million for 2017, and the company is operating at a loss, BoatTest.com said, quoting a company spokesperson in a Tuesday conference call.

Sea Ray was not alone in its decline: overall, new boat sales in the U.S. dropped by more than half from 2000 to 2017, according to BoatTEST.com.

Headquartered in Mettawa, Illinois, Brunswick sells several brands of boat engines and boat parts, a number of boat brands, fitness and recreation equipment.

 


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