Two of the largest retailers of boating supplies joined forces this week when West Marine Inc. purchased for $72 million in cash the retail stores, catalogue operation and wholesale business of its smaller rival BoatU.S., a service group for boaters based in Alexandria.
As part of the deal, West Marine agreed to help recruit members for BoatU.S., which provides marine insurance, towing, boat financing, lobbying and other services for its 535,000 dues-paying boat owners.
West Marine will offer BoatU.S. memberships to shoppers at its 320 stores -- including the 62 purchased from BoatU.S. on Tuesday. The alliance "will allow BoatU.S. to concentrate its resources on what we do best," Richard Schwartz, the group's founder and chairman, said in a statement.
For West Marine, the purchase helps cement its lead in the fragmented $5.5 billion boating aftermarket, which includes hundreds of mom-and-pop retailers.
"This acquisition marks a major milestone in the evolution of the boating products industry," John Edmondson, chief executive of West Marine, said in a statement.
West Marine intends to continue operating the BoatU.S. stores under the BoatU.S. name, Edmondson said. The stores offer similar merchandise -- everything from charts to anchors to fishing gear. But West Marine places a bit more emphasis on sailboats and BoatU.S. on powerboats.
This year, the company's earnings should be 96 cents per share, up from 77 cents a share last year and from 50 cents the year before, said Laura Richardson, an analyst with Adams, Harkness & Hill.
West Marine will now have a 12 percent market share, Richardson said. The next largest rival is Boater's World, owned by the Ritz family of Beltsville, which also owns the Ritz Camera Center chain. Boater's World has about 100 stores.