Let's break this down. First, Novacap and their role. They invested in Fortnine in 2020. They enter into partnerships with small to mid sized companies like Fortnine, rather than buying companies. Their list of companies is lengthy but not major companies most would be familiar with. On the surface, they would appear far less frightening than most private equity firms.
However, it's the Fortnine part that I am apprehensive about. They know nothing about boating and Defender's business, nor really the US business environment. Canadian takeovers of US companies haven't traditionally gone well, even in the same industry. If this was a Chinese company buying, can you imagine the noise that would be made, but tell me the latest on Evinrude. How about Saks?
So, a takeover by a foreign company with no knowledge of the industry and requiring a private equity firm to fund it. Good bye, Defender. Oh, I know you're not leaving yet. I just can't see this going well.
None of my comments are meant to disparage anything Canadian, but business rules and laws and conditions are very different between Canada and the US. This is like a US motorcyle builder buying a French sailboat company. I wouldn't feel good about that. I'm still waiting to see something from the French sailboat and power boat company that bought the US powerboat company. I know that I would be lost trying to operate a Canadian company in an industry in which I had no experience.
Loser in the deal-Defender
Winner-Amazon