Dorman Buys This Powersports Aftermarket Supplier - Benefits Include Cash Flow Generation, New Products & More

  • 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.
  • Photo Via Company
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