The fact that M&A deals have continued to take place despite the ‘Great Lockdown’ (as UBS described the 2020 coronavirus developments) suggests that mergers and acquisitions and more broadly, external growth initiatives, should be part of a company’s strategic planning considerations regardless of broader circumstances.
Companies that have a clear vision and are regularly evaluating all options for competitive positioning to survive and thrive will adjust course depending on the headwinds or tailwinds but ultimately they will continue to utilize the tools that will best help them accomplish their goals.
There have been several interesting deals announced in 2020 in the yachting or marine industry that suggest the companies involved use M&A to regularly recalibrate their businesses.
Here are 3 M&A deals you don’t want to miss:
1. In July, MarineMax acquired Northrop & Johnson, one of the world’s leading superyacht services companies offering new build, brokerage and charter services as well as insurance and crew placement services. MarineMax has had a history of M&A activity as they ‘rolled up close to 30 private dealerships’ across the US in their first 20 years. The N&J deal expands the breadth of their portfolio and solidifies MarineMax’s key leadership position in the high end of the yachting market. In 2019 they signaled this major expansion in services when they acquired Fraser Yachts, one of the largest global superyacht brokerage and luxury yacht services. The move is consistent with MarineMax’s strategy of pursuing “higher margin and digitally enhanced business” while also expanding its footprint well beyond the US.
Bill McGill, Executive Chairman, provided a telling insight into the company’s philosophy regarding M&A during a 2018 interview: “at the end of the day, we’re in a people business (…) making acquisitions is a strategy for a public company, but it’s not our strategy. Our strategy is if we find the right dealers or the right marina locations (…) if it’s really right, it has the people and the culture, we’ll do [the deal].”
2. Safe Harbor Marinas has been pursuing a concerted M&A strategy resulting in consolidation of independent marina operators as it expands its nationwide footprint, offering its members an ever-growing set of locations to visit. In June, Safe Habor announced they had completed the acquisitions of their 99th and 100th marinas. Besides acquisitions, Safe Harbor has also historically leveraged other external growth approaches such as the strategic partnership they secured in 2017 with Freedom Boat Club, the largest boat club operator and the premier marine franchisor in the nation. As an interesting side note, Brunswick Corporation acquired Freedom Boat in 2019 in a forward integration move, thereby providing a steady pipeline of potential customers for its portfolio of boat brands.
3. In May, Lauderdale Marine Center, one of the largest refit and maintenance outfits for superyachts in the US, was partly acquired by the Ferretti Group as the Italian company reached across the Atlantic to expand their North American footprint and their refit and services after-sales.
From a strategic planning perspective, it makes sense that companies should be regularly considering all their options; and external growth (whether through mergers & acquisitions or minority investments or strategic partnerships etc) should be part of that analysis. 2020 has been a year full of unexpected developments. Wise companies will continue to make use of all the tools in their toolbox as they chart the course of their future.
Reach out to the Capstone Team today for a complimentary introductory conversation.
About the Author – Edelweiss Harrison is a Vice President and Head of Strategy at Capstone. While Capstone overall is industry agnostic, Edelweiss leads the efforts to serve companies in the yachting / marine value chain. A strategic advisor for nearly 20 years, Edelweiss works with business owners and C-suite executives to define their vision for the future, prioritize opportunities while also determining which approaches (organic vs inorganic) are most appropriate for different situations.