MarineMax shareholders respond to acquisition offer from founder of IGY Marinas

11 July 2024 • by Dea Jusufi

Yesterday, CEO and founder of Island Capital Group LLC and founder of IGY Marinas Andrew L. Farkas penned an open letter to the shareholders of MarineMax suggesting an acquisition "of up to 100 per cent" of the company's YMRS Business (which comprises IGY Marinas, Fraser and Northrop & Johnson). Farkas sold IGY to MarineMax in 2022.

The Company has since responded: "We are in receipt of the letter from Island Capital Group and will review it. The MarineMax Board of Directors is open-minded and regularly evaluates bone fide opportunities to enhance shareholder value. We will continue to make decisions and take actions that we believe are in the best interest of the Company and our shareholders."

The initial letter alleged that IGY Marinas, Fraser and Northrop & Johnson were not a key focus for the business and this was leading to falling revenues. "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," read the letter.

"It is through this lens that I am making an open proposal to acquire up to a 100 per cent 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."

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