Dorman Buys This Powersports Aftermarket Supplier - Benefits Include Cash Flow Generation, New Products & More - Dorman Prods (NASDAQ:DORM)

Dorman Products Inc DORM has agreed to acquire the independent powersports aftermarket supplier Super ATV LLC for $490 million in cash.
Dorman will also provide an earn-out of up to $100 million payable over two years subject to specific performance targets achieved in 2023 and 2024.
SuperATV is an independent supplier to the powersports aftermarket with a family of brands spanning functional accessories and upgrades and replacement parts for specialty vehicles. SuperATV generated $211 million in net sales in FY21.
Dorman expects the deal to be immediately accretive to margins and adjusted EPS, excluding one-time charges and acquisition-related intangible assets amortization.
In addition, Dorman anticipates significant opportunities to catalyze incremental growth via new product innovation through its "New to the Aftermarket" engine.
The deal is expected to close in the second half of 2022.
Dorman CEO Kevin Olsen said, "This combination aligns with our strategy to diversify our customer base and product offering by providing a compelling entry point to the large and rapidly growing powersports industry."
Dorman expects to obtain a $500 million incremental credit facility in connection with the transaction. It held $51.9 million in cash and equivalents as of June 25, 2022.
Dorman expects the cash flow generation of the combined company to provide it with the flexibility to continue executing its strategic priorities.
Price Action: DORM shares are trading higher by 0.99% at $107.48 on the last check Thursday.
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