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

Credit: REUTERS/Rick Wilking

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)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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