Brunswick Corporation (NYSE:BC) announced today that it has acquired Cybex International Inc., a leading maker of commercial fitness equipment, for $195 million, subject to a working capital adjustment. Cybex will join Brunswick’s Life Fitness Division’s portfolio of leading brands.
Founded in 1970, Cybex offers a full line of cardiovascular and strength products largely serving the commercial fitness market. Its cardio portfolio includes treadmills and exercise bikes, plus the Cybex Arc Trainer, a unique and popular cross-trainer. Cybex’s comprehensive strength category includes selectorized, plate-loaded, functional and free-weight equipment. Cybex’s 2015 sales were estimated at about $169 million.
In 2016, the company believes the acquisition will contribute net benefits of 8 cents to earnings per share, excluding planned restructuring and integration costs. Including the impact of this transaction, Brunswick’s current expectation for 2016 EPS is now in the range of $3.35 to $3.50, as adjusted. This is based on a current estimate of 2015 results that exceeds the company’s previous EPS guidance. By 2018, the final year of Brunswick’s current three-year plan, this acquisition will contribute an incremental 20 cents earnings per share, excluding planned restructuring and integration costs, which increases Brunswick’s targeted EPS range, as adjusted, to $4.55 to $4.95.
“With the addition of Cybex, we will expand our stable of brands serving the complete spectrum of the commercial fitness market, including health clubs, hospitality, education and military, as well as consumers, with a wide array of equipment and features that include a complete suite of services and support,” explained Brunswick President and Chief Operating Officer Mark Schwabero in a press release. “We believe the combination of these premium brands and industry leaders will be well positioned to serve the global fitness market.”
“The Life Fitness/Cybex combination enables us to approach the market with a broader and deeper product portfolio, and improve our ability to address the faster growing segments of the fitness market,” added Schwabero. “With the addition of Cybex’s manufacturing footprint, we can meet current and future demand and achieve manufacturing cost reduction objectives more effectively and efficiently. This combination provides cost synergies and scale as well as manufacturing and engineering capabilities to further improve our competitiveness and leadership position within the fitness industry.”
“As we recently shared with the investment community, we have a three-year plan aimed at growing both Brunswick’s marine and fitness businesses,” said Dusty McCoy, Brunswick chairman and chief executive officer, in the release. “The plan is focused on expanding our fitness segment and our marine parts and accessories businesses, areas we believe offer particularly good opportunities for future growth. Cybex provides a strategic and important step forward on this path to growth.”
