Patrick Industries Inc PATK has signed a definitive agreement to acquire Sportech, LLC for approximately $315 million.
Sportech, based in Elk River, Minnesota, is a designer and manufacturer of complex component solutions to powersports OEMs, adjacent market OEMs and the aftermarket.
Sportech recorded an estimated fiscal year 2023 revenue of about $255 million, with a five-year compound annual growth rate of 17%.
The company expects the acquisition to be immediately accretive to profit margins and net income per share.
Proforma net leverage ratio at closing is expected to approximate 2.9x. After the transaction's closing, Sportech will continue its operations as a wholly owned subsidiary of Patrick under its original name.
The transaction is expected to close on or before January 24, 2024, and is subject to customary closing conditions and regulatory approval.
The all-cash transaction will be funded with a combination of borrowings under Patrick Industries' existing credit facility and cash on hand. It held $16.5 million in cash and equivalents as of October 1, 2023.
Price Action: PATK shares traded higher by 1.31% at $99.71 on the last check Thursday.
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