Activist investor pushes powerboat maker Mastercraft to explore a sale-sources

Mastercraft Boat Holdings

27/10/2020 14:22

By Greg Roumeliotis
    Oct 27 (Reuters) - The Donerail Group LP, an investment firm
led by former activist hedge fund Starboard Value LP executive
William Wyatt, is pushing Mastercraft Boat Holdings Inc  MCFT.O 
to explore a sale, people familiar with the matter said on
Tuesday. 
    Donerail has amassed a stake of a little less than 5% in
Mastercraft and has told the recreational powerboat manufacturer
that it is not happy with its performance, the sources said. 
    While Mastercraft has said it has benefited from consumers
turning to boats as a safer way to vacation during the COVID-19
pandemic, the 18% rise in its shares since Frederick Brightbill
became its CEO last December is less than the 30% rally in the
stock of larger peer Malibu Boats Inc  MBUU.O  over the same
period. 
    Donerail is calling for a sale process for Mastercraft that
could draw interest from other industry players such as
Brunswick Corp  BC.N  and Malibu Boats, as well as private
equity firms, the sources said.
    The sources requested anonymity because the discussions
between Donerail and Mastercraft are confidential. Mastercraft,
Brunswick Corp and Malibu Boats did not immediately respond to
requests for comment.
    Based in Vonore, Tennessee, Mastercraft makes boats used for
water skiing, wake surfing, as well as recreational sailing.
Started out of a two-stall horse barn on a farm in Maryville,
Tennessee in 1968, the company generated net sales of $363
million in the 12 months to the end of June, and has a market
value of $367 million. 
    Were Donerail to succeed in its push for a sale of
Mastercraft, it would be its second successful bet this year. It
also put pressure on Mobile Mini Inc, the biggest U.S. provider
of portable storage solutions, to engage in sale talks. The move
paid off for Donerail when WillScot  WSC.O , the largest U.S.
supplier of mobile office trailers, acquired Mobile Mini this
summer, in a deal that valued the combined company at $6.6
billion, including debt.

 (Reporting by Greg Roumeliotis in New York
Editing by Alexandra Hudson)
 ((Greg.Roumeliotis@thomsonreuters.com; +1 646 223 6022; Reuters
Messaging: greg.roumeliotis.thomsonreuters.com@reuters.net))