(Reuters) - Recreational products maker Brunswick Corp BC.N will spin off its fitness equipment business into a publicly traded firm, the company known for its marine boats and billiards tables said.
Brunswick’s stock rose nearly 7 percent to $61 in premarket trading on Thursday.
The transaction is expected to be tax-free to Brunswick shareholders.
With sales of over $1 billion last year, the fitness business accounted for 23 percent of Brunswick’s overall sales.
The deal will allow the Mettawa, Illinois-based company to sharpen its focus on its marine boats and engines business that houses 14 boat brands including Boston Whaler, Bayliner and Lund.
The fitness business, known for brands such as Life Fitness, Hammer Strength and Cybex, will remain headquartered at Rosemont, Illinois.
Jaime Irick, the president of the business, will lead the independent company when the spin-off deal closes by the end of the first quarter of 2019.
Morgan Stanley was Brunswick’s financial adviser, while Cravath, Swaine & Moore provided legal counsel.
Reporting by Nivedita Balu in Bengaluru; Editing by Sai Sachin Ravikumar
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