Defender Industries has been aquired

[Larry M]

A big move in the marine industry. Canadian powersports company FortNine, which sells equipment through an e-commerce platform, yesterday announced that it acquired Defender Industries in partnership with private equity firm Novacap.

https://www.tradeonlytoday.com/indu...zmw&utm_content=204385433&utm_source=hs_email

 

[HeadMistress]

I just saw that...and it makes me a bit nervous 'cuz private equity focus is almost always entirely on profit, whereas Defender's focus has always been on giving buyers the "best bang for their buck."


--Peggie

 

[Comodave]

Defender has become my go to source lately. Hope it doesn’t change too much.

 

[backinblue]

I share Peggie's concerns. Although most businesses want to make a profit, I know from experience that private equity firms take that to a whole different level. I can't imagine this being a positive thing for Defender's customers, but we'll soon see.

 

[Gdavid]

Defender has become my go to source lately. Hope it doesn’t change too much.

Same with me. I receive items next day when ordering ground shipping. I expected a Christmas card from them considering all I spent with them last season but excellent service is equally appreciated.

 

[kthoennes]

A big move in the marine industry. Canadian powersports company FortNine, which sells equipment through an e-commerce platform, yesterday announced that it acquired Defender Industries in partnership with private equity firm Novacap....]

Oh that's never good. Rats, I've been making that trek to Waterford since I was a teenager with my Blue Jay. They're doomed.

 

[mvweebles]

They will be okay for a year or so. After that, the VC fees and interest will start weighing them down (assuming VC playbook). I have purchased some stuff from Hodges and been happy.

Great run while it lasted. I feel for the employees. On the end, they feel the biggest changes (again, assuming VC playbook)

Peter

 

[Bacchus]

There is a big difference IMO of those outfits looking to be profitable long term and those looking to make short V term profits.
Only time will tell...

 

[mvweebles]

There is a big difference IMO of those outfits looking to be profitable long term and those looking to make short V term profits.
Only time will tell...

Playbook is to load with debt, pay fees to VC guys, strip benefits from employees, raise fees to customers.

Victims of this are many including West Marine, Hinkley Yachts, Gibson Guitars, etc.

Hope I'm wrong.

Peter

 

[rslifkin]

Aww crap. They're pretty much my go to for a lot of stuff. And for certain things like chain, nobody can touch their pricing. If this ruins them like I fear it will, I'm going to be pretty pissed. There are only a handful of good marine supply places around.

 

[Comodave]

I like that they sell hose by the foot.

 

[OldDan1943]

Defender wants to make a profit? Is that a bad thing???
West marine is having trouble finding basic things such as 1" reenforced black rubber hose.
I have had an order in for a length of hose for over 2 weeks. I have bought a 1"x12 ft length from a their competitor.

 

[rslifkin]

Defender wants to make a profit? Is that a bad thing???
West marine is having trouble finding basic things such as 1" reenforced black rubber hose.
I have had an order in for a length of hose for over 2 weeks.I have bought a 12 ft length from a their competitor.

Wanting to make a profit is fine. It's when they get short sighted and sacrifice everything to maximize short term profit that things get ruined.

 

[AlanT]

I like that they sell hose by the foot.

Reminds me of this classic:

~A

 

[CaptTom]

I haven't shopped there in a while, but they used to be first on my list. For a while there (OK, maybe 8-9 years ago now) things seemed to take a bit of a nosedive. Around the same time they had labor troubles. I think they got over a lot of it, but they never seemed to recover that #1 spot in price and service.


I can't imagine this will bring them anything but further down.


The venture capitalists will do what they always do. Stop selling all that low-margin boat gear and load up on fashion items. Cut inventory. Cut pay and benefits. Increase fees. We've seen it all before.

 

[ranger58sb]

Reminds me of this classic:

I may well have seen that when it was first aired on UK TV back in '76. Reminds me of Basil Brush skits, too.

-Chris

 

[Njlarry]

First thing to go will be the catalog.

RIP Defender!

Can Hamilton Marine or Hodges take up the gautlet?

 

[O C Diver]

Well that is sad. They always seemed to have a selection of the hard to find stuff with great manufacturer documentation. If you needed a 1/2" anchor shackle that's load rated, they always carried a great selection with the manufacturer's dimensional information on the website, so you know it would fit your application.

I like Hodges also, but the search engine on their website can be a PIA.

Ted

 

[FWT]

Does anyone have any updates on West Marine since their sale?

 

[twistedtree]

I hold out a little more hope only because FortNine is a real and operational company running a business similar to Defender but in the Powersports market. So it's not just a company buying monopoly pieces. That said, I can't even open FortNine's web site, so maybe they aren't as operational as one might hope.....

 

[rslifkin]

I hold out a little more hope only because FortNine is a real and operational company running a business similar to Defender but in the Powersports market. So it's not just a company buying monopoly pieces. That said, I can't even open FortNine's web site, so maybe they aren't as operational as one might hope.....

That's the only thing giving me hope as well. I just gave their site a try and it works for me.



Worst case, hopefully Hodges, Hamilton, Fisheries Supply, Citimarine, and the handful of others can take up the slack.

 

[backinblue]

What's that saying....??

Hope in one hand, crap in the other, see which one fills up first.

 

[Hippocampus]

Flipped to Fisheries Supply awhile ago. Still miss the annual sale at defender back when it was worth going. Very much miss walking into a chandlery actually seeing and touching something before buying. But biggest deal with any internet purchase is chatting with the help and getting useful advice from someone who actual knows something about the project you’re undertaking.
My home town had three chandleries. Each privately owned. They were institutions. People would go there to just hang out and socialize. All were walking distance from the water. Now it has one West. Still in town but a drive away from the harbor. Staff is nearly clueless. More than 1/2 the stuff is “special order” anyway so not worth going there most times.
Downside of internet retail model.

 

[RT Firefly]

Greetings,
Website opened for me....https://fortnine.ca/en/

 

[Datenight]

First thing to go will be the catalog.

It went two years ago.

Rob

 

[BandB]

Let's break this down. First, Novacap and their role. They invested in Fortnine in 2020. They enter into partnerships with small to mid sized companies like Fortnine, rather than buying companies. Their list of companies is lengthy but not major companies most would be familiar with. On the surface, they would appear far less frightening than most private equity firms.

However, it's the Fortnine part that I am apprehensive about. They know nothing about boating and Defender's business, nor really the US business environment. Canadian takeovers of US companies haven't traditionally gone well, even in the same industry. If this was a Chinese company buying, can you imagine the noise that would be made, but tell me the latest on Evinrude. How about Saks?

So, a takeover by a foreign company with no knowledge of the industry and requiring a private equity firm to fund it. Good bye, Defender. Oh, I know you're not leaving yet. I just can't see this going well.

None of my comments are meant to disparage anything Canadian, but business rules and laws and conditions are very different between Canada and the US. This is like a US motorcyle builder buying a French sailboat company. I wouldn't feel good about that. I'm still waiting to see something from the French sailboat and power boat company that bought the US powerboat company. I know that I would be lost trying to operate a Canadian company in an industry in which I had no experience.

Loser in the deal-Defender
Winner-Amazon

 

[twistedtree]

Let's break this down. First, Novacap and their role. They invested in Fortnine in 2020. They enter into partnerships with small to mid sized companies like Fortnine, rather than buying companies. Their list of companies is lengthy but not major companies most would be familiar with. On the surface, they would appear far less frightening than most private equity firms.

However, it's the Fortnine part that I am apprehensive about. They know nothing about boating and Defender's business, nor really the US business environment. Canadian takeovers of US companies haven't traditionally gone well, even in the same industry. If this was a Chinese company buying, can you imagine the noise that would be made, but tell me the latest on Evinrude. How about Saks?

So, a takeover by a foreign company with no knowledge of the industry and requiring a private equity firm to fund it. Good bye, Defender. Oh, I know you're not leaving yet. I just can't see this going well.

None of my comments are meant to disparage anything Canadian, but business rules and laws and conditions are very different between Canada and the US. This is like a US motorcyle builder buying a French sailboat company. I wouldn't feel good about that. I'm still waiting to see something from the French sailboat and power boat company that bought the US powerboat company. I know that I would be lost trying to operate a Canadian company in an industry in which I had no experience.

Loser in the deal-Defender
Winner-Amazon

I think a lot has to do with whether they try to "fix" Defender. If they leave them along and let them continue to be the good company that they already are, it might go well. But will that happen? I know you have argued that you only buy a company if you think you can make it better with changes.

 

[BandB]

I think a lot has to do with whether they try to "fix" Defender. If they leave them along and let them continue to be the good company that they already are, it might go well. But will that happen? I know you have argued that you only buy a company if you think you can make it better with changes.

Well, you might buy if the previous owners are anxious to exit and you can buy at a discounted multiple. Perhaps the Lance family was ready to exit, perhaps worried about loss of sales to Amazon and others. Family owned since 1938. In this case, the acquisition required more funding and that is always worrisome.

I don't know who here watches Shark Tank, but the sharks have very different areas of expertise and often they'll decline to make an offer saying, "I don't have anything to bring to you." So, wonder what the buyer in this situation feels they can bring to Defender. My guess is internet sales and marketing, from website design to search engine optimization.

I think this statement may give us a greater clue:

"This first add-on acquisition for FortNine is in line with our ambition to expand the expertise and business model across verticals," adds Antoine Casimir, Principal at Novacap. Today, we are executing on our strategy to build an e-commerce powerhouse for sports enthusiasts."​

 

[OldDan1943]

Yup, buy a company that is doing well and plan to expand it by changing the ever famous 'business model'. Sadly, the new owners may not understand the uniqueness the business, implement their own business plan and the company may continue to have trouble or have new trouble, change the business plan again and again until the ending result has no relationship to the original business. Example: I went to my closest West marine to get a 10ft length of 1inch reenforced black rubber hose. They had to special order it ..... It's approaching 3 weeks. I went to Boat Owners Warehouse picked up 12ft length 3 days later. At West marine.... the bins of nuts, bolts, there was a sign "Do not inventory" and lots of empty drawers. (cant sell what you dont have) For years, West marine has been selling wire that does not meet marine requirement, we buy and use it. (no solder)
Perhaps, stores are acquired to combine hard to get items. When the inventory has been sold, then then one or both companies are dissolved. Hark, a new business model has been written. 'buy or merge, sell the useful inventory, dissolve the company.' Along the way the upper level management get a very nice salary.

 

[rslifkin]

Sometimes in the IT industry you'll see an acquisition because the acquiring company wants a product. So they just buy someone who already makes a good one instead of creating their own. If we're lucky, Fortnine wants to get into marine supply and decided the best way to do that is to buy a company that already does it well.

In the end, I don't see Amazon as much of a factor in this. They're not great for buying boat stuff. There's a ton that they just don't have, and plenty of stuff that they mostly have cheap knock offs of. No hose or chain by the foot
Not always the best price either. Most of the time if I'm buying from Amazon for the boat, it's not a marine specific item.

Realistically, in my mind the ideal marine supply situation is to have places like Defender that carry basically everything and mostly do mail order. And then places like West Marine to focus mostly on things people need on short notice or want to see and touch before buying.