Island Capital bids on MarineMax yachting, marina business

Private equity firm Island Capital Group (ICG) has offered to acquire the MarineMax yachting and marine business for $480m.

“We propose acquiring the YMRS assets at double-digit EBITDA valuation multiple, while the company currently trades within a 5-6 times multiple range,” Andrew L. Farkas, CEO, Island Capital Group said in letter to MarineMax shareholders. “Thus, our proposal could unlock significant value for shareholders.”

Farkas sold his Island Global Yachting (IGY) to MarineMax in 2022 after founding the company in 2002. However, Farkas said that since the acquisition of IGY, MarineMax has failed to deliver on the growth it promised during the sale and he wants to buy those assets back.

“No new assets were acquired by IGY while competitors have raised capital and developed and acquired assets, putting IGY’s competitive advantages at risk and the company has failed to advance any of the growth initiatives IGY highlighted in its sales process,” Farkas said in the letter.

In response to the expression of interest from ICG, MarineMax said it “will continue to make decisions and take actions” to benefit shareholders.

“The MarineMax board of directors is open-minded and regularly evaluates bone fide opportunities to enhance shareholder value,” read the statement. “The board is always open and responsive to input from key stakeholders and we have spoken with Island Capital on several occasions.”

In June, OneWater Marine also offered to acquire MarineMax in an all-cash deal valued at $2.5bn including debt.

Commenting on OneWater’s proposal, Farkas in his letter said that the “rumoured transaction with OneWater may undervalue MarineMax as a whole and would also carry significant contingencies and regulatory risk.”

Farkas also claimed that MarineMax owes ICG and affiliates an earnout payment who still hold a material financial interest in the company. The earnout payment, of around $67.7m, is due in less than a year. “This could be favourably resolved as part of this proposal,” said Farkas.