OXE Marine AB joins forces with U.S. distributor Diesel Outboards and Outdoor Network Manufacturing to strengthen their focus on commercial and distribution development
OXE Marine AB has entered into an agreement to acquire 100% of Diesel Outboards and Outdoor Network Manufacturing’s U.S. distribution and manufacturing business. Through the Transaction, OXE strengthens its position in the U.S. market, creating a direct to market model, gaining access to end-user, dealer, governmental and OEM network, following the successful ramp-up of production of OXE300 earlier this year.
The purchase price of $10.8 million, is to be financed through a share issue in kind to the selling entity Powersports Plus LLC (an Outdoor Network Group company), making them the largest shareholder in OXE. Additionally, Martin Polo, CEO of the Outdoor Network Group, will have a seat on the board of OXE. The share issue is supported by a majority of shareholders, including the largest owners. The Transaction is subject to approval from the European Investment Bank, the holders of OXE’s corporate bonds and Valley National Bank, the current bank for Diesel Outboards and Outdoor Manufacturing. Closing is expected to take place on Jan. 31, 2022.
In conjunction with the transaction, Magnus Grönborg has decided to step-down as CEO due to personal reasons and the board of directors has appointed Anders Berg as acting CEO beginning in January, but no later than Jan. 31.
The U.S. outboard market represents approximately 40% of the world-wide sales of outboard engines and between 40%-50% of OXE Marine’s revenue.
Diesel Outboards (an Outdoor Network LLC company) is OXE Marine’s largest distributor, with extensive marine experience and a network of over 40 dealers and over 40 OEM Boat Builders in the U.S.
Through the Transaction, OXE will significantly strengthen its position in the U.S. market, creating a direct-to-market model and gaining direct access to end-users, dealers, and OEM Boat Builders, including the important governmental sector. In addition, as a part of the transaction, OXE Marine will acquire Outdoor Network Manufacturing (an Outdoor Network LLC company) which is a dedicated OXE manufacturing facility in Albany, Ga., currently manufacturing the OXE200 range of products.
As part of the transaction, OXE acquires a U.S. team of 18 experienced resources and will be awarded the exclusive global distribution rights for Jet-Tech, the world’s first ultra-high-performance waterjet for outboards, as well as all rights for Diesel Outboards exclusive government containerized life cycle support for outboard deployment and support “C-CRES”. Additionally, OXE will gain access to Outdoor Network LLC’s web marketing, social media, and sales channels, including boats.net, a global marine parts and accessories retailer for the largest brands in the marine market.
The acquired businesses include assets with a net value of approximately $7.8 million and intangible assets of $3 million. Included in the tangible assets is a minimum cash balance of $700,000 with the final cash balance determined on Dec. 31, 2021. In addition, as part of the transaction, Powersports Plus LLC has agreed to be guarantor for a working capital facility of $5 million, to be taken up by the acquired entities post completion.