Platinum Equity, a global private equity firm, has announced the purchase of Ingersoll Rand’s Specialty Vehicle Technologies segment, which is primarily Club Car. The purchase price is $1.68 billion. The transaction is expected to close in the third quarter.
SVR’s Take
This is probably better for Club Car but that remains to be seen. Club Car always seemed a bit of an odd fit within Ingersoll Rand. The management did not make bold moves while being enmeshed in the conglomerate. Like the other golf car manufacturers, they were well positioned to take advantage of the off-road utility vehicle market, but mainly stayed in their lane and ceded much of the lucrative market to the powersports companies. They also allowed E-Z-GO to beat them to the market with lithium powered golf cars and personal transportation vehicles.
The question is how aggressive is Platinum Equity willing to be. Are they just looking for some operational efficiencies to milk more profits out of the steady but unexciting golf fleet market and the smaller but growing PTV and light duty utility vehicle markets. The firm owns some existing companies that already play in the automotive space to varying degrees that may provide some synergies like Ying Shing Enterprises, a China based injection molder and metal stamper, electronics manufacturer PCI Private Limited and Elevate Textiles.
On the other hand, maybe Platinum Equity see opportunities to expand the business by building on robust manufacturing volume, established supply chains and expertise in electric vehicles. The urban mobility/micro mobility market beckons, but will Club Car leave the golf car path? How about last mile delivery? Can Club Car transfer their strengths to electric scooters, e-bikes or other alternative electric vehicles? There are already startups establishing themselves in these markets. Arcimoto’s three-wheeled vehicle could challenge in portions of their utility and PTV markets. Polaris is partnering with Optimus Ride on low-speed autonomous vehicles.
The latter begs the question, was Polaris in the running to purchase Club Car? They like to acquire leading brands. Perhaps they didn’t see enough growth prospects. On the other hand, they may believe they can take advantage of new opportunities with less investment through GEM and their other in-house electric vehicle assets as they move to electrify their powersports products. It will be interesting to see in what direction Club Car and other players in the small, task-oriented vehicle market move next.
Marc Cesare, Smallvehicleresource.com
