Am curious to hear everyone’s thoughts on this.
FOR IMMEDIATE RELEASE
CONFLUENCE HOLDINGS TO ACQUIRE WATERMARK’S WATER SPORTS DIVISION
Trinity, NC, May 12, 2005 - Confluence Holdings Corp. (“Confluence”)
announced today that a purchase agreement has been signed under which
Confluence will acquire the water sports division’s assets of WaterMark
Paddlesports Inc. (“WaterMark”), including WaterMark’s paddlesports brands,
the WaterMark name and WaterMark’s assets in Easley, SC. The agreement does
not include WaterMark’s land sports division. Industry veteran Richard
Feehan has been named CEO of Confluence. The transaction is expected to
close Monday, May 16th, 2005.
“This is a very exciting time for me to come on board at Confluence,” said
Feehan. “Confluence and WaterMark’s paddlesports division include the most
recognized brands in the industry and together will form the premier
paddlesports company in the world.”
Founded in 1998, Confluence was formed through the merger of Mad River
Canoe, which included Voyageur, and Wilderness Systems, which included
WindRider. In 2001, Confluence expanded its range of products with the
acquisition of Wave Sport. The Confluence family of brands includes Mad
River CanoeR, Wilderness SystemsR touring and recreational kayaks, Wave
SportR whitewater kayaks, WindRiderR sailing trimarans, and VoyageurR water
sports accessories.
WaterMark was formed in 1998 through the merger of Perception and Dagger.
Since then, WaterMark has expanded its product range to include Harmony, AT
Paddles, Yakima, and Rhode Gear. WaterMark’s paddlesports division brands
includes DaggerR touring and whitewater kayaks, PerceptionR touring and
whitewater kayaks, MainstreamR recreational kayaks, HarmonyR paddlesports
accessories and AT PaddlesR.
Confluence and the WaterMark paddlesports division will continue to operate
as autonomous business units for the remainder of the 2005 selling season.
Confluence fully anticipates that industry veterans Kelley Woolsey, SVP
Marketing & Sales, and Bob McDonough, VP of Research & Development, will
continue to lead the Confluence side of the business, and Brian Fisch, VP of
Sales, Ron Barlow, VP of Operations, and Tony Lee, Director of Research &
Development, will continue to lead the WaterMark side.
“As this acquisition will be taking place in the midst of the selling season
we will do everything we can to ensure that there is no disruption to our
customer service, delivery performance or sales coverage. It will be
business as usual for our customers,” added Feehan.
As part of the agreement, Confluence has contracted WaterMark to continue to
handle all customer service activities for the WaterMark paddlesports
division from their current customer service center in Arcata, CA, during
the transitional period. In addition, during this period Confluence will
rebuild a customer service and credit department for the division in the
Easley facility.
ABOUT CONFLUENCE HOLDINGS CORP.
Confluence Watersports Company, based out of Trinity, NC, manufactures and
distributes water sports equipment under the Mad River CanoeR, Wilderness
SystemsR, WindRiderR, VoyageurR, and Wave SportR brands. Voyageur is a
leading line of canoeing and kayaking accessories including whitewater and
other quality paddles, along with personal flotation devices, storage gear
and apparel. The Mad River Canoe Brand is recognized as the quality leader
in the canoe industry. Under the Wilderness Systems brand, Confluence
manufactures top-quality fiberglass, Kevlar, and rotationally-molded kayaks.
The Wave Sport brand is one of the paddling industry’s premier whitewater
kayak brands. WindRider is a unique line of sailing trimarans. The company’s
wholly-owned subsidiary, Confluence Watersports Canada, Inc., distributes
all the brands in Canada. For more information visit-
www.confluencewatersports.com
ABOUT WATERMARK
WaterMark is a leader in technical products for outdoor recreation and
manufactures and distributes the industry’s most complete line of
whitewater, touring and recreation kayaks. The company’s brands include
kayak leaders DaggerR, PerceptionR, and MainstreamR, in addition to HarmonyR
paddle sports accessories, AT PaddlesR, and YakimaR and Rhode GearR vehicle
racks. WaterMark is headquartered in Beaverton, Oregon, with offices in
Easley, SC.
###
wow, so it finally happened…
this has been a rumor for months now. This is a good thing in terms of cheap recreational kayaks getting even cheaper (pricewise) and more widely available to the public. This means more people getting into kayaking. Due to the fact that rec kayaks are the highest margin and the biggest growth area, the smaller kayak shops will feel the hit due to the Walmart kayaks of the world. However, with increased number of people kayaking, perhaps the number of people paddling high end kayaks will increase down the line. Also it is a bad thing in that one company has most of the major kayaking/canoeing/accessory brands under one umbrella. This means that Confluence can bully shops into taking their full line in a sort of all-or-nothing kind of deal. Also creativity in terms of new kayaks might be stifled when there is less incentive to differentiate yourself in a monopolistic market.
It’s scary
I don’t like it. I look at what happened to Dagger and Perception, and it’s enough to give me the willies. There is a lot of product redundancy between all these brands, so I’m just hoping that we don’t loose even more good boats.
Interesting, but actually…
I don’t really care. All the the brands involved are now second run or worse for most items, at least for the things I use. I just bought a Thule rack system. I would never buy a Dagger WW boat or a Perception sea kayak. I have an older AT paddle but would not buy a new design. The smaller companies out there are making better stuff and I am happy to support them. The Microsoft of the kayak world will keep bloating along but hopefully will go the way of General Motors (junk bond status).
Funny, I Was Thinking The Same. 
fate of Kodak vs. Fuji
Kodak became a big lumbering giant that couldn’t get any innovation done quickly. Fuji came along and ate their lunch.
Confluence is becoming the same. They’ll save some moeny on volume, but design is about to get seriously diluted.
I would imagine that polyethylene
prices will decrease (slightly) due to greater purchasing leverage. Due to the macro-economic supply/demand curve for plastic resins, this decrease, if any, will not be substantial and will have a nominal effect, if any, on the cost of plastic yaks. Offsetting this will be a quasi-monopolistic ability to control pricing in the marketplace for plastic yaks.
Keep in mind that a venture capital fund owns Confluence and their goal is to trim expenses and maximize margins to be able to “flip” the combined company in three to five years. I suspect there will be minimal, if any, long-term commitment toward product development and creativity. In fact, I would predict, with a degree of assurance, that the product design teams will be halved to create economies of scale.
I also think this will give the secondary kayak manufacturers impetus for further product differentiation, which may enhance the growth of those players if strategized correctly.
I would welcome an executive of “Newco” to present their philosophy on these boards (without standard company line BS) to assure their customer base that they are committed to the further enhancement of paddlesports.
Put this on the discussion forum.
Bigger ain’t better!
The shop I once worked for closed and the biggest reason was we put Wilderness and Perception on the map and then got hammered by the box stores. Oh I remember well when the rep for Perception told us that him selling Galyan’s would HELP our business. And I was stunned to hear the Wilderness guy say the same thing about him selling to Dick’s. We couldn’t get some good selling models but the box stores had them at $100 less than our modest price. I just hope all the true paddlesport shops still left dump this new conglomerate and support the real kayak brands still out there. Or they can get hammered like we did.
some good ww boats still!
Although I am completely willing to support companies such as Liquid Logic, Fluid, Jackson, etc., Dagger still has some nice boats. I personally am a big fan of their Crazy 88 and I personally paddle a GT. I loved their Kingpin as well but it leaked a bit too much for me to buy it. Although I’m strictly a used boat shopper these days, I still believe that Dagger has excellent designs (for now).
My 2 cents
1. We’ll see a business as ususal polcy at Watermark/Confluence for the next 6 months.
2. Next season we will see the beginings of both brands morphing into one. Competing brands within these two umbrellas will just go away.
3. Small Boat shops will definitely see an impact.
4. This giant is about selling volume, nothing else. Think about it, neither Confluence or Watermark was around in 1998 and now they have the lions share of this market. This is not good news for a lot of people, but I think it is for their competition.
Higher end touring gear will really see an impact from creative new designs from smaller manufacturers. Sure, Wilderness Systems has the Tempest, which is an EXCELLENT boat. But the majority of Confluence and Watermarks touring lines are just mass produced, mediocre designed crap.
5. There will be a lot of people who will boycott these brands for various reasons.
“The “Venture Capitalist” behind this company is actually an investment group in the Middle East.”
“The Company is what is wrong with the industry”
Etc…
In closing, I am not sure how to take the news that Yakima is now in place and that there will be so many people effected by this sale. I know for a fact that there are a lot of very scared and very nervous people at the Watermark Co. today. The first phase of lay-offs was yesterday with lots more to come.
lol…the standard line…
Yup, I love when they tell you that the “additional exposure” will help all dealers in the area (never true, since the exposure usually comes complete with low-ball prices and a loss-leader mentality that’s out to pimp cheap kayaks and canoes as a way to get ‘em in the store and sell some $90 fleece pullovers).
Confluence doesn’t have a great track record, unfortunately, when it comes to making sure that the big boxes don’t dump their product at the expense of their specialty retailers. Dick’s has been advertising a few of the “Victory” versions of WS kayaks at what is essentially dealer cost - which only serves to make the specialty shops’ inventory of that boat unsellable. Not a great way to strengthen the public perception of value of your product.
Ah well, it only opens up the market to some new competition, since the specialty shops will be more aggressive this fall in looking for lines that WON’T be whored out at the boxes.
Way to go Matt
You have some great lines already so filling any potential gaps should be easy.
perception handling customer service
is the worse thing that could happen. i just went through an issue with perception ans was handed daily bs. i have actual written proof of the bs. perception and the store i dealed with appearantly couldnt decide on matters so i got to wait about 2 months to get my warrantied boat. wonderful customer service. i guess watermark can only improve since they are at the bottom now.
Agree with Disco…
Last year i began paddling with a group of 1st year paddlers. Almost every one had a low end recreational kayak.
This season, over 60% have graduated up in their kayaks and only one was a perception ( a Carolina 14.5 which accd. to its owner has tracking problems). Flimsey was the pre operative word when potential buyers tested2005 carolinas…Three went with Necky…Two with Prijons.
While I still have (and will keep) my 13.5 America as the creek and pond and fishing boat, I’m a rarity in that I kept the america for more than a year after I got into kayaking.
Used low end kayaks will become the roadside toss away of the decade in the next few years…
Agree with Disco…
Last year i began paddling with a group of 1st year paddlers. Almost every one had a low end recreational kayak.
This season, over 60% have graduated up in their kayaks and only one was a perception ( a Carolina 14.5 which accd. to its owner has tracking problems). Flimsey was the pre operative word when potential buyers tested2005 carolinas…Three went with Necky…Two with Prijons.
While I still have (and will keep) my 13.5 America as the creek and pond and fishing boat, I’m a rarity in that I kept the america for more than a year after I got into kayaking.
Used low end kayaks will become the roadside toss away of the decade in the next few years…
cheaper entry level boats
could be a good thing for the whole market. the base of the pyramid is getting bigger. i expect the sport to grow at every level. many thousands more neophytes getting into yaks means more demand, ultimately, for high end boats. and hopefully fewer motorboaters : )
yep
People complain when Companies grow but they complain more if they pack up and leave. And ANY business that doesn’t grow or doesn’t WANT to grow has a problem or will have one… Econ 101 folks!! I am glad they are merging It will bring more folks into the fold and that’s NOT a bad thing, cause if Joe blow is paddling Plastic, like DB9 said he may just move up. But better yet if he’s is paddling ANYTHING he is still paddling, instead of possible jetting around on a ski or some other POWERD water sports equipment. Catch more fly’s with CHEAP honey!!
oil prices
it’ll be interesting to see the squeeze manifest itself on recreational activities.