Brunswick Corp., Mettawa, Illinois, announced on March 1 its board of directors has approved a "spin-off" of the company's Life Fitness Division into an independent, standalone, publicly traded company, temporarily known as "FitnessCo."
The decision comes on the heels of a Jan. 30 letter by Brunswick activist investor Owl Creek Asset Management arguing "all Brunswick stakeholders would benefit significantly from a spin-off of the fitness equipment business." In addition to its Fitness segment, Brunswick also is comprised of marine engine and boat businesses.
“Our Board of Directors and management regularly review our portfolio of businesses and brands, and after careful review, have determined that a spin-off of the Fitness business is the best option to maximize the value of both businesses,” Brunswick CEO Mark Schwabero said in the release. “With this action, FitnessCo will be positioned to continue to grow, innovate and provide customers with high-quality solutions while also ensuring that the Marine business is best positioned to continue creating value for our shareholders. We are pleased to have built two well-established businesses that are clear leaders in their respective industries, and both will benefit from greater focus and dedicated leadership with each pursuing distinct strategic plans that will drive targeted investment, attractive growth and shareholder returns.”
In addition to Life Fitness, FitnessCo (to be formally renamed at a later date) will include the Hammer Strength, Cybex, Indoor Cycling Group, SCIFIT and Brunswick Billiards brand names.
"The proposed transaction is projected to be complete by the end of Q1 2019, subject to final approval from Brunswick's Board and other customary conditions," according to the release.
Jaime Irick, the current president of the Life Fitness Division, will continue to oversee FitnessCo out of its current Rosemont, Illinois, office, while Mark Schwabero will continue to lead Brunswick out of its Mettawa office, according to the release. Brunswick will continue to trade on the New York Stock Exchange under the "BC" ticker symbol.
Life Fitness recently reported a 5 percent increase in its 2017 year-end revenue.
Correction: The original story noted that an active investor prompted the spin off move. Brunswick denies that inference.