Luxury yacht builder Grand Banks Yachts (GBY) announced that it will be acquiring two properties in Newport, Rhode Island in the US for a total purchase consideration of US$21.0 million ($28.1 million).
The properties boast a full-service marina, a covered workshop, boat storage space, guest accommodation, supporting amenities and parking areas. It is capable of berthing up to 20 boats in the water and more on the land.
This acquisition will provide strategic expansion in its main geographical market in the US and enhance long-term sales of Grand Banks and Palm Beach Motor Yachts. The group had previously expressed interest to expand its footprint into the East Coast of the US, saying that it was the "final piece of the puzzle" in its expansion plans into the US.
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With a rich heritage and historic waterfront including the most famous yacht club in the world, Newport, Rhode Island is highly regarded as one of the premier boating destinations in the US. This acquisition will provide Grand Banks and Palm Beach Motor Yachts with the opportunity to strengthen its sales and further enhance customer experience. This is timely after the group unveiled its newly expanded composite manufacturing facility in Johor this month.
Thus far, the group's subsidiary, Stuart Yacht Corporation, has paid a total deposit of US$1.0 million in escrow after entering into the sales and purchase agreement.
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The proposed acquisition remains subject to due diligence and the group will be convening an extraordinary general meeting (EGM) to obtain shareholders’ approval. Upon completion, the group will pay a further US$5.0 million in cash, totalling US$6.0 million. These payments will be funded from internal sources.
The remaining US$15.0 million will be paid over four annual instalments of US$1.875 million plus interest with a balloon payment on the fifth instalment of US$7.5 million plus interest. The group intends to fund the instalment payments and final payment using internal cash resources of the group, external funding or a combination of both.
Ahead of the EGM, the group will issue a circular setting out further information.
GBY's CEO, Mark Richards, says, “I am very excited with this opportunity for the group. This acquisition will have immense strategic value to enhance our future sales and customer experience. The group will be able to build a stronger presence and attract new customers within the prestigious North East region of the US.”
