Brunswick to sell BNT, Ben Baffled
Well, I’ll be damned! The very unexpected news is that Brunswick now plans to sell much of Brunswick New Technologies, specifically the marine electronics bundle of Northstar, Navman and MX Marine plus Navman’s non-marine operations. This plan seemingly torpedos my notion that electronics, engine, and boat builders must follow the Brunswick lead and become closely intertwined as all their products become more integrated. What don’t I understand about this picture?
Later today: Of course I’ve called a few folks in the industry; in this little world, Brunswick’s announcement is a big deal, and, it turns out, anticipated by no one I know. You’d think that Raymarine and Maptech might be celebrating; I believe they’ve both been living in fear of losing substantial business if and when Brunswick boatbuilders standardised their helms on Brunswick electronics. But there are way too many uncertainties to this deal. For starters, it’s odd that Brunswick has only announced a desire to sell Navman/Northstar, not the buyer. Some players are fearful that that buyer will be Garmin, others that it will be Raymarine. Or maybe it’s a red herring, and only Navman’s non-marine business will actually get sold (which makes plenty of sense).
As for me, it’s too bad that my recent PMY electronics columns aren’t online (it’s a manpower issue, and I’m told they’ll all go up eventually), because then I could illustrate my embarrassing bafflement with a couple of links. The main one would be my March column about the Northstar 8000i, where I described how it’s taken a few years for Brunswick to digest Northstar and Navman, how these names—now really two brands used by the same global team of developer/manufacturers—have to compete for business within Brunswick as well as without, and, finally, how the 8000i looks like the system that might realize former (good point, Russ, below) Brunswick CEO George Buckley’s vision of a totally integrated boat, and thus win BNT a big chunk of Brunswick business. I’d also have to link you to the current May issue of PMY, where I take a look at Lowrance and wonder if its acquisition by Altor, along with Simrad and a boatbuilder closely associated with Volvo, might be the beginning of a Nordic version of Brunswick. Oy, I even finished with some noodling about “how Brunswick’s electronics and engine divisions are coming together in a seamless, possibly impenetrable, fashion…” May I hereby add: Or not!
You don’t understand corporate politics. Look at the history. New CEO named last December and lauded for his purchases of boat brands. Q4 earnings are $.90 / share. In February he shuffles his management team but does nothing in the “New Technologies” group, then acquires Cabo Yachts, another boat brand. In April he reports earnings of $.70 / share, down from $.96 the previous year. The “New Technologies” were not contributing to the bottom line:
Commenting on the first quarter, Brunswick Chairman and Chief Executive Officer Dustan E. McCoy said, “The 5 percent sales growth from ongoing operations was driven primarily by contributions from boat companies acquired subsequent to the first quarter last year, as well as increased sales from our Bowling & Billiards and Fitness segments. Excluding the benefit of acquisitions, sales were down slightly.
Bottom line, it’s a boat company, not an integrated engine company.
They need electronics expertise, but the whole point of open standards like NMEA 2000 is that you don’t have to do everything yourself. Look to the computer or networking industry, both rich in open standards, so see how this will evolve. The monolithic “IBM only” world of 1970 evolved into a very efficient multi-vendor environment that has driven prices way down and performance way up. Dell doesn’t need to own Intel to be successful. IBM doesn’t need to own Cisco to be heavily networkd.
I think the more interesting, or scary, issue with this sale is that with the exception of Raymarine, all the major marine navigation companies are up in the air. Simrad, B&G, Northstar and Navman are all experiencing rapid changes in ownership which in general is not good for long term committments to innovation and product development.
“Multi-vendor enviroment” this will not happen in the marine industry becuase it is not a consumer electronics market. The numbers are too small.
Multi-vendor is already happening. I can attach my Lowrance fuel sensors to a network with my Maretron tank level sensors and display them on my Raymarine chartplotter, meanwhile also taking inputs from my Airmar sensors and outputting to my VHF radio. Heck, the only thing that’s not integrated at this point is the stereo head unit but some chartplotters are already talking about integrating MP3 playback. So much for your theory of it “not happening”.
It’s true the numbers in boating pale in comparision to consumer or automotive electronics. But that doesn’t mean they don’t grasp the value of interoperability.
As for Brunswick, one gets the sense they’re a financial trainwreck waiting to happen. Gorging themselves buying everything from electronics to marinas and then trying to mash it all together under one management umbrella? That’s a recipe for disaste. Any smart investor should not view them as a long term value.
It is important to note here that Brunswick is NOT planning on selling MotoTron, its leader in SmartCraft CANbus integrated boat electronics. They are quickly increasing the number of ‘SmartCraft’ capable electronics which includes NorthStar and Navman.
I don’t believe Brunswick is losing much in this sell-off, they are merely conentrating more heavily on their marine business.