Riverside Co. Commits To Retail Boat Platform –

The Riverside Co. last month acquired its second boat retail chain in less than eight months when it bought Link Recreational, a dealer in Wisconsin and Minnesota, for approximately $30 million. Newcourt Financial was the senior lender.

In recent years, Link has expanded to nine from one store and has opened service centers in Minnesota and Wisconsin. As a result of this expansion, Link was undercapitalized and needed an equity infusion. Because the retailer had excess inventory, Riverside did not commit much equity to the investment as far as a percentage of the purchase price. Instead, it plans to sell down Link’s inventory to more manageable levels and use the cash to pay bank debt, Mr. Seversen said.

Riverside now has invested $10 million of equity in its boat platform. Through its acquisitions, it has built a company with about $120 million in revenue. The firm would like to build the platform into a business with a $200 million capitalization in the next two years and then bring it to an initial public offering, Mr. Seversen said.

The Riverside Co. is trying to build the dominant boat retailer in the Northwest and the Great Lakes and is also eyeing the West Coast. The two largest boat retailers-MarineMax and Travis Marine-both target the Southeast and are publicly traded companies.

To achieve this goal, Riverside hired a chief executive who had partnered with a competing financial buyer on a failed platform play in the same industry.

Bob Steinway, now Link’s CEO, had partnered with another financial buyer only a few months earlier to start another boat retailing platform but could not close any acquisitions. The former co-presidents of Olympic-the company did not have a CEO-will remain in their positions but will take more passive roles in the company, said Michael Seversen, who heads Riverside’s San Francisco office.