v3.26.1
BUSINESS COMBINATIONS
 12 Months Ended
Jun. 30, 2026
Business Combination [Abstract]  
Business Combination

4. BUSINESS COMBINATIONS

On May 15, 2026, the Company completed the merger with Marine Products, pursuant to which each share of Marine Products common stock, par value $0.10 per share, was converted into the right to receive 0.232 shares of the Company’s common stock, par value $0.01 per share and $2.43 in cash, representing total merger consideration of approximately $284.2 million.

As a result of the Marine Products Transaction, the Company reevaluated its reportable segment structure and determined that the operations acquired from Marine Products constitute a separate reportable segment. Accordingly, beginning on May 15, 2026, the Company began reporting the acquired operations within its newly established Recreation and Sport Fishing segment. For the period from May 15, 2026 through June 30, 2026, Marine Products contributed net sales of $33.3 million and net loss of $6.6 million.

The following table summarizes the fair value of the merger consideration transferred:

 

 

Amount

 

Shares of Marine Products common stock

 

 

34,863,738

 

Exchange ratio

 

 

0.232

 

Shares of MasterCraft common stock issued

 

 

8,088,171

 

MasterCraft closing share price

 

$

24.64

 

Stock consideration for shares issued

 

$

199,293

 

Partial consideration for shares of Assumed RSAs

 

$

118

 

Total stock consideration

 

$

199,411

 

Shares of Marine Products common stock

 

 

34,863,738

 

Cash Consideration per share

 

$

2.43

 

Cash consideration

 

$

84,725

 

Partial cash consideration for Assumed RSAs

 

$

50

 

Total cash consideration

 

$

84,775

 

Total merger consideration

 

$

284,186

 

The following table summarizes the preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed based on their estimated acquisition-date fair values:

 

 

Preliminary Fair Value

 

Cash and cash equivalents

 

$

30,664

 

Accounts receivable

 

 

5,292

 

Inventories

 

 

55,105

 

Prepaid expenses and other current assets

 

 

4,792

 

Property, plant and equipment

 

 

67,845

 

Goodwill

 

 

105,599

 

Other intangible assets

 

 

65,100

 

Investment in affiliate

 

 

4,331

 

Other, net

 

 

1,620

 

Deferred income taxes

 

 

(17,193

)

Unrecognized tax positions

 

 

(9,212

)

Accounts payable

 

 

(11,448

)

Accrued expenses and other current liabilities

 

 

(18,309

)

Total

 

$

284,186

 

Included in the assets acquired is a 50% equity-method investment in 255 RC, LLC (“255 RC”), a limited liability company formed for the joint purchase and ownership of a corporate aircraft. The preliminary fair value assigned to the investment was $4.3 million as of the acquisition date. See Note 14 – Related Party Transactions for further information.

The purchase price allocation is preliminary and subject to change as the Company finalizes valuations of certain acquired assets and assumed liabilities, including inventory, property and equipment, identifiable intangible assets, warranty liabilities, income taxes, and other working capital balances. The Company expects to finalize the purchase accounting during the measurement period, which will not exceed one year from the acquisition date.

Goodwill recognized in the Marine Products Transaction was assigned to the Recreation and Sport Fishing segment. The goodwill primarily represents expected synergies from the combination of operations, expanded product offerings, future growth opportunities, and other benefits that do not qualify for separate recognition as identifiable intangible assets. The goodwill is expected to be not deductible for income tax purposes.

The following table summarizes the details of the purchase price allocated to the other intangible assets acquired:

 

 

Amount

 

Weighted Average Life

Trade names

 

$

37,500

 

Indefinite

 

 

 

 

 

Dealer Networks

 

 

25,000

 

11 years

Other

 

 

2,600

 

1.5 months

Finite-lived intangibles

 

 

27,600

 

10 years

Total

 

$

65,100

 

 

The following unaudited pro forma information represents the combined results of operations of the Company and Marine Products as if the acquisition occurred on July 1, 2024:

 

 

Fiscal Year Ended

 

 

 

2026

 

 

2025

 

Net Sales

 

$

565,799

 

 

$

508,571

 

Net Income

 

$

11,410

 

 

$

(6,457

)

These pro forma results were based on estimates and assumptions, which we believe are reasonable. They are not the results that would have been realized had we been a combined company during the periods presented and are not necessarily indicative of our consolidated results of operations in future periods. The pro forma results include adjustments related to purchase accounting, primarily amortization of intangible assets, the inventory step-up charge, and property, plant, and equipment fair value depreciation adjustments, and removes non-recurring Marine Products Transaction costs in fiscal 2026 and applies these costs to fiscal 2025, adjusted for the effects of income tax.

The Company incurred acquisition-related costs of $15.2 million during fiscal 2026 related to the Marine Products Transaction. These costs are included within general and administrative expenses in the accompanying consolidated statement of operations.