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Brunswick Acquired Cybex International to Increase Market Share


Jan. 26 2016, Updated 7:40 a.m. ET

Brunswick’s price movements

Brunswick Corporation (BC) has a market cap of $3.5 billion. BC rose by 1.1% to close at $38.49 per share on January 20, 2016. The price movements on weekly, monthly, and year-to-date (or YTD) bases are -15.3%, -21.4%, and -23.8%, respectively.

Technically, the stock has broken the support and is trading below all moving day averages. Currently, BC is trading 17.9% below its 20-day moving average, 23.7% below its 50-day moving average, and 24.5% below its 200-day moving average.

The First Trust Mid Cap Growth AlphaDEX ETF (FNY) invests 1.2% of its holdings in Brunswick. The ETF tracks a tiered equal-weighted index of mid-cap growth stocks selected by S&P’s AlphaDex selection methodology from the S&P 400 Index. The YTD price movement of FNY is -8.6% as of January 19, 2016.

The First Trust Consumer Discretionary AlphaDEX ETF (FXD) invests 0.83% of its holdings in Brunswick. The ETF tracks an index of large-cap and mid-cap US Consumer Discretionary stocks. The underlying index uses multifactor selection and tiered equal weighting.

The WisdomTree MidCap Earnings ETF (EZM) invests 0.79% of its holdings in Brunswick. The ETF tracks an earnings-focused index of mid-cap stocks.

The competitors of Brunswick (BC) and their market caps are as follows:

  • Cummins (CMI) – $15.0 billion
  • Caterpillar (CAT) – $34.2 billion
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Brunswick’s acquisition of Cybex International

Brunswick has acquired Cybex International for $195 million, subject to a working capital adjustment. Cybex will join Brunswick’s Life Fitness Division portfolio of leading brands and will increase market share in the global fitness market.

This acquisition will contribute $0.08 to EPS (earnings per share), excluding planned restructuring and integration costs. Brunswick expects EPS of $3.35–$3.50, as adjusted, for fiscal 2016.

This transaction will contribute $0.20 to EPS, excluding planned restructuring and integration costs. Brunswick expects EPS of $4.55–$4.95, as adjusted, for fiscal 2018.

Brunswick’s performance in fiscal 3Q15

Brunswick (BC) reported fiscal 3Q15 net sales of $991.9 million, a rise of 6.4% compared to net sales of $932.1 million in fiscal 3Q14. Its net income and EPS fell to $75.9 million and $0.81, respectively, in fiscal 3Q15, compared to $104.4 million and $1.10, respectively, in fiscal 3Q14.

Its cash and cash equivalents and inventories rose by 4.3% and 6.1%, respectively, in fiscal 3Q15 on a quarterly basis. Its debt-to-equity ratio rose to 1.42 in fiscal 3Q15 compared to 1.39 in fiscal 3Q14.

Brunswick’s PE (price-to-earnings) and PBV (price-to-book value) ratios are 15.5x and 2.8x, respectively, as of January 20, 2016.


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