Will Provide Cornerstone to Expand Group Exercise Segment Participation
LAKE FOREST, Ill. July 28, 2016 - Brunswick Corporation (NYSE:BC) today announced it has signed an agreement to acquire Indoor Cycling Group (ICG), a market leader specializing in the design of indoor cycling equipment. ICG is based in Nuremburg, Germany.
Terms of the transaction were not disclosed. ICG's 2015 revenues were approximately €37 million ($41 million), and the transaction is subject to usual and customary closing conditions as well as approval by the German competition authority, which is anticipated sometime late in the third quarter. At that time, ICG would become part of Life Fitness' global operations.
"Our vision is to build and augment our product and technology portfolio to establish a strong leadership position in the global group exercise market," explained Brunswick Chairman and Chief Executive Officer Mark D. Schwabero. "Group exercise is a growing sector of fitness and represents another important adjacency that we have targeted to expand our fitness business.
"Blending ICG's integrated technology and programming capabilities in the indoor cycling space, with our broader Life Fitness product assortment, is an important component of our strategy to grow our fitness business, and consequently, Brunswick. Additionally, we believe that Life Fitness' strong product development and distribution capabilities will further advance ICG's position within the group exercise and indoor cycling markets," Schwabero said.
"Our stated goal is to double the size of our Fitness operations by 2020, and we are pursuing that goal with a growing stable of prominent brands, including Life Fitness, Hammer Strength, Cybex and SCIFIT. Through the integration of additional leading brands - such as ICG's Tomahawk - into our product portfolio, we are building and strengthening our position in several market segments," Schwabero added.
"ICG will provide a cornerstone from which we plan to expand our presence in group exercise," echoed Life Fitness President Chris Clawson. "We're eager to join it with our existing group exercise products such as Life Fitness SYNRGY360, Row GX Trainer and the Hammer Strength rigs and racks to provide a robust product portfolio for our global customers."
Clawson said the ICG management team, staff and operations will remain largely intact, and under the direction of founder and current Chief Executive Officer Bernd Puerschel, who will report to Clawson.
ICG was founded in 1995. Among other attributes, ICG products are particularly recognized for their aesthetics, design and integrated technologies, Clawson added. ICG has exclusive rights to key technologies such as the WATTRATE® Power Meter, one of the most accurate and robust power meters in the fitness market. It also includes "Coach By Color," a highly effective and motivational system in which the range of color covers the physiological responses to the different types of training required to meet the demands of group-fitness-based cycling. Such technologies and capabilities, Clawson pointed out, provide ICG with a sustainable competitive advantage supporting the strongest product portfolio within the group exercise cycling category.
"As the supplier of Life Fitness' existing group cycling bike, we have had a strong relationship with ICG for the past five years. Through this relationship we know that ICG's culture of innovation and its customer-focused approach are a great fit for our team. We look forward to having ICG join the Life Fitness family," Clawson concluded.
ICG will have minimal impact upon Brunswick's 2016 results.
Certain statements in this news release are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on current expectations, estimates and projections about Brunswick's business. Forward-looking statements by their nature address matters that are, to different degrees, uncertain and often contain words such as "may," "could," "expect," "intend," "target," "plan," "seek," "estimate," "believe," "predict," "potential" or "continue." These statements are not guarantees of future performance and involve certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this news release. These risks include, but are not limited to: the effect of adverse general economic conditions, including the amount of disposable income available to consumers for discretionary purchases, tight consumer credit markets and the level of consumer confidence on the demand for the Company's products and services; negative currency trends, including shifts in exchange rates; the ability to make targeted acquisitions and successfully integrate newly acquired businesses; the ability of the Company to successfully implement its strategic plan and growth initiatives; the ability of dealers and customers to secure adequate access to financing and the Company's ability to access capital and credit markets; the ability to maintain strong relationships with dealers, distributors and independent boat builders; the ability to maintain effective distribution and develop alternative distribution channels without disrupting incumbent distribution partners; the ability to successfully manage pipeline inventories; credit and collections risks, including the potential obligation to repurchase dealer inventory; the risk of losing a key customer or a critical supplier; the strength and protection of the Company's brands and other intellectual property; the ability to absorb fixed costs in managing production facilities; the ability to successfully manage the expansion of the Company's manufacturing footprint; the ability to obtain components, parts and raw materials from suppliers in a timely manner and for a reasonable price; the need to meet pension funding obligations; uncertainties in the timing and amount of the Company's share repurchases; the effect of higher energy and fuel costs; competitive pricing pressures, including the impact of changing foreign currency exchange rates, inflation and increased competition from international competitors; the ability to develop new and innovative products at a competitive price and in compliance with applicable laws and to maintain product quality and service standards; the continued use of legacy information technology systems and the risk of a failure of or attacks on the Company's information technology systems, which could result in data breaches, lost or stolen assets or information and associated remediation costs; competition from other leisure pursuits that may affect the level of participation in boating and fitness activities; the risk of product liability, warranty and other claims in connection with the manufacture and sale of products; the ability to protect the Company's intellectual property; the ability to respond to and minimize the negative financial impact of legislative and regulatory developments, including those related to environmental restrictions and remediation efforts, climate change, healthcare costs, taxes and employment obligations; the risk of having to record an impairment to the value of goodwill and other assets; doing business in international locations, including risks of international political instability, civil unrest and operations in emerging markets; the ability to attract and retain key contributors and to successfully implement succession plans; the effect of weather conditions on demand for marine products; and the effect that catastrophic events, including hurricanes, floods, earthquakes and environmental spills, may have on consumer demand and the ability to manufacture products.
Additional risk factors are included in the Company's Annual Report on Form 10-K for 2015. Such forward-looking statements speak only as of the date on which they are made and Brunswick does not undertake any obligation to update any forward-looking statements to reflect events or circumstances after the date of this news release or for changes made to this document by wire services or Internet service providers.
Headquartered in Lake Forest, Ill., Brunswick Corporation's leading consumer brands include Mercury and Mariner outboard engines; Mercury MerCruiser sterndrives and inboard engines; MotorGuide trolling motors; Attwood, Garelick and Whale marine parts and accessories; Land 'N' Sea, Kellogg Marine, Diversified Marine, BLA and Bell RPG parts and accessories distributors; Bayliner, Boston Whaler, Brunswick Commercial and Government Products, Crestliner, Cypress Cay, Harris, Lowe, Lund, Meridian, Princecraft, Quicksilver, Rayglass, Sea Ray, Thunder Jet and Uttern; Life Fitness, Hammer Strength, Cybex and SCIFIT fitness equipment; InMovement products and services for productive well-being; and Brunswick billiards tables, accessories and game room furniture. For more information, visit http://www.brunswick.com.