My two cents in purely business terms. Spoiler alert: it has the capacity to be good for owners of both brands, which is different from a prediction it will be, because stuff can always be messed up in implementation.
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If I were a Kady or AT boat owner I'd be reasonably happy with this. But no one can know what comes next due to unforeseen people issues or some other plan not yet visible.
My two cents.
Completely agree with your perspectives.
I can see how on the surface this acquisition is appealing to both companies. Krogen might be looking for a U.S. (non-Asian) manufacturing base, given all the absurd political anti-China sabre rattling by both parties in Washington lately. Plus AT owns the smaller and less expensive Ranger and Cutwater lines, which might be better sellers if you think economic conditions are going to soften in coming years (I believe the smallest boat Krogen now sells is the 44, well into 7 figures).
From AT's perspective, the founders have been at it for almost 25 years, and I believe 2 of the 3 original founders had already retired from active management. They might simply be tired and looking for their financial exit.
But... having worked in corporate mergers & acquisitions for a couple of companies over the years, I never ceased to be amazed and amused how little attention was often paid to the financial details, and how so many acquisitions were done for superficial, emotional reasons (companies actually believing their own press release hype about 'synergies')(unlike private equity acquisitions which are all about the numbers and putting a sharp scalpel to them).
The glaringly obvious point many companies overlook when buying another one is
paying for it. I understand profit margins in the boat industry are generally thin. Top-line revenues might be good, but bottom-line profits skimpy. Depending on how Krogen paid for AT - presumably cash, using debt, since I suspect AT's owners probably wouldn't be too interested in simply exchanging their private shares for another company's private shares - you have to find the cash flow to actually pay for the debt service. That's where things often get painful a short distance down the road.
Most acquisitions optimistically talk about 'no changes to the business,' 'keeping everything exactly the same,' etc. etc. But where does the cash flow come from to pay the debt service? Particularly if both companies have relative thin profit margins, the money has to come from somewhere. Which usually means, cost cutting, a common financial justification for buying another company. You don't need two CEO's, CFO's, etc. The hope often is to find enough cost savings to pay for the debt service. It often usually work out so well, and as
@DDW said, often a reason why so many acquisitions don't live up to their hopes.
I've never owned a Krogen but have owned two AT's over the years. I think they are an absolutely outstanding boat, superb quality. I hope that continues into the future.
