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On Sun, 29 Mar 1998, William M. Smithers wrote:
> On Fri, 27 Mar 1998, Dive Rite wrote:
>
> > Always the last to know.
> > I got the news today.Lamar came in my office and told me that Dive Rite
> > was purchased by ScubaPro.Funny thing is, he didn't even know it.How
> > does this stuff get started????? I really enjoy my job because even with
> > all the stress you still get some comic relief on a daily basis.He says
> > whoever has this first hand knowledge needs to send him a BIG check.
> > 1000 comedians out of work.........................
>
> Hmmm...the question, of course, is, what what the
> gross revenue multiple?
>
Or, more interestingly, *why*?
Clearly, this is the best indication yet that the
major manufacturers have peaked the recreational
market growth curve, and are now looking to
"get technical" in hopes that will be the
next market of growth.
Interesting news, for all concerned, as, at mimimum,
it lends market validity to technical diving.
My prediction: Scubapro will continue to operate
Dive Rite as an independant entity for 12-18 months,
while the size of the Scubapro logo increases. Then
Dive Rite (a hokey name anyway), will go away, and
the products will be absorbed into the Scubapro line.
Undoubtedly, the Scubapro Engineers will make
design revisions along the way.
Scubapro does not need to buy a name - they can
create a name anytime they'd like - what they
need is *expertise*, and clearly, this acquisition
grants them that opportunity. Plus, the cash-flows
must have settled into the realm of classic
acquisition, because Scubapro isn't desparate
enough to pay a big multiple. Nor is Dive Rite
innovative enough to demand it.
All-in-all not a bad market move, but all it
really says is that the growth rate of the
recreational market has stagnated, and Scubapro
felt compelled to make a progressive move. An
alternative thought is that Scubapro is acquiring
cash-flows as preparation toward raising capital.
If this is a harbinger of anything, it's that
PADI (run by lawyers) is now likely to unveil a
tech nitrox and trimix course schedule - truly a scary
thought.
There, you have the Wall Street perspective ('cause
I'm the only one on the 'street who could give
a sh*t).
-Will
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