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Patrick Industries (NASDAQ:PATK) announced that it has signed a definitive agreement to acquire Sportech for approximately $315M.
Minnesota-based Sportech is described as a leading designer and manufacturer of high-value, complex component solutions to powersports OEMs, adjacent market OEMs and the aftermarket, including integrated door systems, roofs, canopies, bumpers, windshields, fender flares and cowls.
“With a focus on supplying premium components to the powersports industry, particularly the attractive utility vehicle segment of the market, Sportech recorded estimated calendar year 2023 revenue of approximately $255 million, resulting in a five-year compound annual growth rate of 17%.”
Patrick Industries (PATK) expects the acquisition to be immediately accretive to profit margins and net income per share. The all-cash transaction will be funded with a combination of borrowings under the Company’s existing credit facility and cash on hand. Proforma net leverage ratio at closing is expected to approximate 2.9X, with the company focusing on reducing its net leverage ratio to pre-acquisition levels within the next two to three quarters. Following closing, Sportech will continue its operations as a wholly owned subsidiary of Patrick under the Sportech name and within its existing facilities.
The Sportech transaction is expected to close on or before January 24, and is subject to customary closing conditions and regulatory approval.
Shares of Patrick Industries (PATK) fell 1% in premarket action on Thursday. The recreational vehicle stock is up more than 50% over the last 52 weeks.