Polaris Industries will not provide first-party retail financing for marine vehicles following its acquisition of Boat Holdings, a luxury boat manufacturer, Powersports Finance has learned.
“Currently, the dealers and consumers handle the retail financing for the various brands,” a Polaris spokeswoman told PSF.
Polaris acquired Boat Holdings on May 30, adding the marine sector to its motorcycle, all-terrain vehicle, and snowmobile brands. Boat Holdings specializes in manufacturing luxury pontoon, deck, and cruiser boats, with recognized brands such as Bennington, Godfrey, Hurricane, and Rinker.
“[Polaris’s] philosophy has always been to prefer partnerships and third-party financing for the financing of its products specifically,” David Beckel, senior equity analyst at Sanford C. Bernstein, told PSF.
On the powersports side, Polaris has partnerships with FreedomRoad Financial (for its Performance Finance program), Sheffield Financial, and Synchrony Financial.
“[Polaris’s] typical objective of acquiring a business would be to acquire the best brand with the best distribution and dealers, so they feel like they’ve checked all the boxes with respect to this particular company,” Beckel added. “[Boat Holdings is] primarily pontoon boats, which is kind of a relatively limited portion within the broader marine landscape. They felt like it’s a nice addition to their general powersports portfolio.”
Polaris expects the acquisition to boost growth, since pontoon boat sales have experienced 11% compounded annual growth since 2010. The OEM’s sales increased to $1.3 billion in the 1Q18, with it’s largest segment, off-road vehicles/snowmobiles, growing to $833 million, according to an earnings call.
Additionally, 30% of Polaris customers own boats, leading to cross-selling opportunities.