BRP to Sell its Telwater Business to Yamaha Motor Australia

Rhea-AI Summary

BRP Inc. (TSX: DOO, NASDAQ: DOOO) has announced a definitive agreement to sell Telwater Pty, to Yamaha Motor Australia, a subsidiary of Yamaha Motor Co., The sale includes renowned boat brands Quintrex, Stacer, and Savage.

This transaction marks BRP's first step in divesting its Marine businesses to focus on core Powersports activities. The deal is expected to complete in the second quarter of BRP's Fiscal 2026, subject to regulatory approvals. National Bank Financial Inc. served as financial advisor, while Stikeman Elliott LLP acted as legal advisor to BRP on the transaction.

Positive

• Strategic focus on core Powersports business through divestiture of non-core marine operations
• Sale to established industry player (Yamaha) ensures smooth business transition

Negative

• Reduction in business diversification through exit from marine segment
• Loss of revenue stream from Telwater operations

Insights

Financial Analyst

BRP's sale of Telwater to Yamaha Motor Australia marks the first transaction in its strategic exit from Marine businesses to focus exclusively on Powersports. This corporate restructuring aligns with management's stated goal of channeling resources toward core operations where they likely see stronger competitive advantages and growth potential.

The divestiture includes established Australian boat brands Quintrex, Stacer and Savage, though no financial terms were disclosed. Without visibility into Telwater's contribution to BRP's overall revenue or profitability, it's difficult to quantify the immediate financial impact. However, this move should streamline BRP's business model and potentially improve operational focus.

From a strategic perspective, this transaction represents a double-edged sword. On one hand, concentrating on Powersports could enhance capital allocation efficiency and management attention on a single core business. On the other, it reduces business diversification, potentially increasing BRP's vulnerability to Powersports industry cycles.

With the transaction expected to close in Q2 of BRP's fiscal 2026, investors should monitor subsequent announcements regarding additional Marine business sales and how management redeploys the proceeds - whether toward strengthening the Powersports segment, reducing debt, or returning capital to shareholders.

Marine Industry Expert

Yamaha Motor Australia's acquisition of Telwater demonstrates the ongoing consolidation in the recreational marine manufacturing sector. As an established player in Australia since 1983, Yamaha gains valuable local brands with strong market recognition in Quintrex, Stacer, and Savage, enhancing its competitive position in the region's boat market.

For BRP, divesting marine assets signals a strategic realignment rather than financial distress. The recreational marine industry often requires different manufacturing capabilities, distribution networks, and customer engagement strategies compared to powersports vehicles. This specialized nature likely influenced BRP's decision to exit the segment entirely rather than operate it as a distinct business unit.

The transaction's timing coincides with evolving market dynamics in recreational boating, with established players seeking to strengthen their portfolios through strategic acquisitions. For Australian dealers and customers of these boat brands, Yamaha's established presence should provide continuity and potentially enhanced support, though integration processes always carry execution risks.

With regulatory approval still pending, the anticipated Q2 fiscal 2026 completion suggests a straightforward transaction without major competitive concerns. This deal represents a sensible strategic fit for both companies, allowing each to focus on their respective strengths in the recreational vehicle market.

VALCOURT, QC and BRISBANE, Australia, March 31, 2025 /PRNewswire/ - BRP Inc. (TSX: DOO) (NASDAQ: DOOO) announces today that it has entered into a definitive agreement to sell 100% of the outstanding shares of Telwater Pty, Ltd. to Yamaha Motor Australia Pty Ltd., a subsidiary of Yamaha Motor Co., Ltd. The acquirer has been established in the region since 1983 and a key player in Australia's boat industry.

This transaction follows BRP's decision to sell its Marine businesses to channel its efforts and investments towards its core Powersports activities, thereby enhancing its position for long-term success.

"We are pleased with today's announcement, our first transaction in the process for the sale of our Marine businesses," said José Boisjoli, President and CEO of BRP. "I would like to sincerely thank all of the talented employees for their contribution and commitment over the years. We know we can count on their professionalism to continue supporting our dealers and customers with dedication through this transition period, until the transaction is completed."

Telwater Pty, Ltd. includes the businesses of renowned brands such as Quintrex, Stacer and Savage. This transaction is subject to certain customary closing conditions, including regulatory approval, and is expected to be completed in the second quarter of BRP's Fiscal 2026.

National Bank Financial Inc. acted as financial advisor and Stikeman Elliott LLP acted as legal advisor to BRP on the transaction.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
Certain information included in this release, including, but not limited to, statements relating to the completion of the sale of Telwater Pty, Ltd., the anticipated benefits associated with the completion of this sale, the receipt of all requisite approvals to complete the acquisition, the closing date of the acquisition and the Company's business and strategic plans, and other statements that are not historical facts, are "forward-looking statements" within the meaning of Canadian and United States securities laws. Forward-looking statements are typically identified by the use of terminology such as "may", "will", "would", "should", "could", "expects", "forecasts", "plans", "intends", "trends", "indications", "anticipates", "believes", "estimates", "outlook", "predicts", "projects", "likely" or "potential" or the negative or other variations of these words or other comparable words or phrases. Forward looking statements, by their very nature, involve inherent risks and uncertainties and are based on several assumptions, both general and specific. BRP cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although reasonable at the time they were made, subject to greater uncertainty. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results or performance of BRP to be materially different from the outlook or any future results or performance implied by such statements. Further details and descriptions of these and other factors are disclosed under the heading "Risk Factors" of the Corporation's management's discussion and analysis for the fiscal year ended on January 31, 2025.

About BRP
BRP Inc. is a global leader in the world of powersports products, propulsion systems and boats built on over 80 years of ingenuity and intensive consumer focus. Through its portfolio of industry-leading and distinctive brands featuring Ski-Doo and Lynx snowmobiles, Sea-Doo watercraft and pontoons, Can-Am on and off-road vehicles, Alumacraft and Quintrex boats, Manitou pontoons and Rotax marine propulsion systems as well as Rotax engines for karts and recreational aircraft, BRP unlocks exhilarating adventures and provides access to experiences across different playgrounds. The Company completes its lines of products with a dedicated parts, accessories and apparel portfolio to fully optimize the riding experience. Committed to growing responsibly, BRP is developing electric models for its existing product lines. Headquartered in Quebec, Canada, BRP had annual sales of CA$7.8 billion from over 130 countries and employed approximately 16,500 driven, resourceful people as of January 31, 2025.

www.brp.com
@BRPNews

Ski-Doo, Lynx, Sea-Doo, Can-Am, Rotax, Alumacraft, Manitou, Quintrex, and the BRP logo are trademarks of Bombardier Recreational Products Inc. or its affiliates. All other trademarks are the property of their respective owners.

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SOURCE BRP Inc.

FAQ

What brands are included in BRP's Telwater sale to Yamaha Motor Australia?

The sale includes three renowned boat brands: Quintrex, Stacer, and Savage.

When is the BRP (DOOO) Telwater sale expected to close?

The transaction is expected to complete in the second quarter of BRP's Fiscal 2026.

Why is BRP (DOOO) selling its Telwater business?

BRP is selling its Marine businesses to focus investments on core Powersports activities for long-term success.

What approvals are needed for the BRP-Yamaha Telwater deal to close?

The transaction requires regulatory approval and certain customary closing conditions.