Island Capital offers to acquire YMRS Business from MarineMax

Island Capital Group LLC released an open letter to the shareholders of MarineMax, in which Island Capital managing member, chairman, and CEO Andrew Farkas made an open proposal to acquire up to a 100% interest in the YMRS Business from MarineMax. “The acquisition of IGY has not enhanced MarineMax’s valuation or provided any meaningful uplift to the Company’s share price,” the letter reads. “In fact, prior to the June 2, 2024 news of a rumored acquisition of the Company by OneWater Marine Inc. (“OneWater”), MarineMax’s share price was approximately 25% lower than where it was at the time of the IGY transaction announcement. Further, MarineMax currently trades at a similar valuation to OneWater, its largest competitor, which does not even have a business equivalent to the YMRS Business. Thus, the acquisition of IGY has done nothing to distinguish MarineMax from its competitors. We believe that the YMRS Business is not a key focus of management. The MarineMax management team does not spend a meaningful amount of time discussing these assets on its earnings calls. The Company’s investor materials also reflect the view that this portfolio is an afterthought. Furthermore, there are no meaningful synergies between the retail boat business and the YMRS Business. The YMRS Business is a real estate and luxury services business, whereas the retail boat business is a product business. The customer bases are completely different. It is through this lens that I am making an open proposal to acquire up to a 100% interest in the YMRS Business from MarineMax. Based on publicly available information, we believe that this portfolio of assets is not adequately valued by the public market and thus has added no value to you as shareholders. We propose acquiring the YMRS assets at double-digit EBITDA valuation multiple, while the Company currently trades within a 5-6 times multiple range. Thus, our proposal could unlock significant value for shareholders. A sale of the YMRS Business would provide a substantial amount of cash for the Company at a time when its core business is under pressure, and the proceeds could be utilized in an accretive fashion to repurchase stock, delever the Company and/or pursue acquisitions in the Company’s core business. Additionally, to the extent desirable, ICG is willing to acquire less than 100% of the YMRS Business (although not less than 75%), allowing MarineMax to retain some ownership and potentially benefit from ICG’s growth strategy.” “ICG is seeking to engage with MarineMax immediately,” the letter continues. “We believe that a transaction could be completed in as little as 60-90 days, and we stand ready to commence a dialogue with MarineMax’s management and board of directors about any aspect of our proposal.”