OXE Marine Buys Diesel Outboards and Outdoor Network
OXE Marine AB announced it is joining forces with U.S. distributor Diesel Outboards and Outdoor Network Manufacturing to strengthen the focus on commercial and distribution development.
The diesel outboard engine manufacturer said it agreed 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 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 January 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, commencing this role during January but no later than the January 31.
According to OXE Marine, the U.S. outboard market represents approximately 40% of the worldwide sales of outboard engines and between 40%-50% of OXE Marine’s revenue.
Diesel Outboards is OXE Marine’s largest distributor, with extensive marine experience and a network of 40+ dealers and 40+ OEM Boat Builders in the U.S. 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, Georgia, currently manufacturing the OXE200 range of products. OXE acquires a U.S. team of 18 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”.
The acquired businesses include assets with a net value of approx. $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 December 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.
“Over the last months, we have reviewed our strategic position and core competencies of OXE, both from a product and organizational perspective. Stemming from that review, it is clear that we must further develop the commercial side of our business to complement our strong engineering background as well as the recent progress made in our supply chain and production capabilities,” said Magnus Grönborg, CEO of OXE Marine.
“With the sustainable, disruptive and innovative products we have introduced to the marine market, we now want to intensify the focus on our end-users and customers, working substantially closer with them. With this deal we are confident that a direct model, offering direct relationships with the users and customers, combined with our current distributor model, will provide significant insight into the next steps of our growth and development. Close relationships with users and a full focus on leading service and support packages is imperative for our success.
“Diesel Outboards has been very skilled, loyal, ambitious, and successful in their development of the market and have an impressive organization with significant application knowledge, complementing our current business with a passionate and seasoned marine team that we all welcome to OXE.
“At the same time, we are very pleased to welcome Outdoor Network LLC (via Powersports Plus LLC) as the new industrial and majority owner of OXE.
“No doubt, this is transformational for OXE, and we now have an operational and commercial platform in both Europe and U.S.A. that will serve as a steppingstone for further global growth. I am personally excited to see the innovation, growth, new business and products that this transaction will unlock for the future of OXE – we now really take the next step in our development,” said Anders Berg, Chairman of OXE Marine.
“The joining of our two companies through this merger will greatly strengthen OXE’s position in the marine diesel outboard world. With OXE’s superior engineering capabilities and Diesel Outboard LLC’s industry knowledge and advanced sales and marketing expertise, we are confident there will be a significant global increase in demand for OXE’s products. As one company, we solidify OXE’s position as the go-to trusted partner in the growing market for high torque and high horsepower diesel outboard motors,” said Tom D'Azevedo Executive Chairman Outdoor Network.