Yakima Acquires Hubco Automotive in Step Toward Global Expansion

Yakima acquired Hubco from phil&teds, a New Zealand maker of baby strollers and other juvenile products that acquired Hubco in mid-2008. Yakima did not disclose terms of the deal, which marks its first acquisition since being acquired a year ago by Kemflo International Co. Ltd., a long time supply chain partner based in Taiwan.

The deal gives Yakima a sleeker aero bar rack system to add to its line in North America, where it remains in a tough fight with Sweden’s Thule AB. While Thule’s standard cross bars are square and Yakima’s are round, aero bars – short for aerodynamic bars – are more elliptical. In addition to improved styling, aerobars offer reduced wind resistance and noise, proponents say. Thule offers an aero roof rack system that claims to be more aerodynamic and quieter, but until now Yakima has not. Hubco also makes Prorack, a lower priced line that includes solutions for contractors, a market Yakima has not pursued beyond systems to help drivers of pick-up trucks carry boats, bikes and other gear. Both Whispbar and Prorack use the “Smartfoot” tower system that installs and transfers simply to virtually any vehicle. The company says such versatility reduces the stock dealers must carry. Whispbar towers also come standard with locks, which Yakima and Thule sell separately.

While Hubco will continue to operate as a separate company with most of its existing management and supply chain, Yakima will incorporate the Whispbar into its North American product offerings next year.
The company has yet to determine how it will distribute Hubco’s products for the North American professional market. Hubco currently distributes through only a handful of U.S. dealers, most of which are also Yakima dealers.

“This is a growth play,” Yakima CEO Jerry Heinlen said of the deal. “It allows Yakima to expand in the USA with Whispbar as a premium offering and Prorack as a mid-priced line, and also blend the best from Yakima and Hubco internationally to make a compelling offering. We have little to no distribution overlap geographically.”

Industry observers hailed the deal as a good move for Yakima because it speeds up its international expansion, while giving Hubco access to the huge North American market. Yakima only began focusing on international expansion in the last few years. It distributes in Korea and entered the Australian market in October. Hubco, meanwhile, has become the leading vendor in Australia and New Zealand, already does business in Europe and Canada, but only entered the U.S. market in 2009.

“If someone was to come into the North American market on their own, I would say you have a major uphill battle to get the big retailers to commit to a major third brand,” said one major car rack dealer, who requested anonymity. “But by coming in with one of the two existing, dominant brands that already have distribution, they will do fine.”
The dealer said he welcomed a third major brand even though it will require he stock more inventory, because it gives consumers one more reason to go to his stores for guidance.