MarineMax Draws Fresh Buyout Interest Following Donerail’s Bid

By Svea Herbst-Bayliss

NEW YORK, Feb 25 (Reuters) - Private equity firms including Blackstone and Centerbridge Partners, strategic investors and wealthy individuals have expressed interest in buying recreational yacht retailer MarineMax or pieces of it, three sources familiar with the matter told Reuters.

Confidentiality Agreements Circulated

Prospective Buyers and Process

Buyout Interest and Shareholder Pressure at MarineMax

The company, which also operates marinas and services superyachts, has sent out confidentiality agreements allowing the parties to review documents and receive other information to shape a potential bid, said the sources who are not permitted to discuss the private talks. 

Recreational vehicle retail company Blue Compass, investor Island Capital Group and private equity group TPG have also expressed interest, the sources said.

Representatives for the firms declined to comment or did not return calls and emails seeking comment.

MarineMax did not immediately respond to a request for comment.

Deal Certainty Caution

There is no guarantee any deal will be reached, however, the sources cautioned. 

Market Tailwinds for Marinas

Demand for the marinas business is currently a hot investment area as interest rates have dropped and consumer demand for boats appears to be rising, industry analysts said.

Company Response and Advisors

Earlier this week, MarineMax said that it remains committed to carefully evaluating any credible proposal that could improve shareholder value. 

The outreach to MarineMax and its bankers comes less than a month after Reuters reported that Donerail Group, which owns a 5% stake in the company, offered to buy all of it for just over $1 billion.

Wells Fargo Engagement

MarineMax hired Wells Fargo bankers earlier this year after receiving the Donerail offer. Wells Fargo declined to comment.

Headquartered in Clearwater, Florida, MarineMax caters to a wealthy clientele through its 65 marinas and storage locations and 70 dealerships, with megayachts listed for sale on its website in the millions of dollars.

Shareholder Activism and Governance

Pressure has been building on the company to take action ever since Donerail last year called on the board to make sweeping changes that ranged from selling the company to replacing its chief executive officer.

While MarineMax has made some changes and replaced several directors, including removing the chief financial officer from the board last year, the moves failed to satisfy Donerail.

Levin Capital’s Call for Review

Last week, Levin Capital Strategies, one of MarineMax's 10 largest shareholders, publicly called on the company to immediately begin a strategic review. The firm also urged the board to engage with Donerail after receiving its offer.

Board Vote Timeline

Next week, shareholders will vote on who sits on the company's board at its annual meeting, deciding the fate of CEO Brett McGill, son of MarineMax founder Bill McGill, who is up for election.

Performance and Valuation Snapshot

Since Brett McGill became CEO in 2018, the company's earnings per share have dropped 64% and in the last five years MarineMax's share price has dropped 43% while the broader Standard & Poor's 500 index returned 76%.

This year, shares of the company, which is valued at $628 million, have climbed 18%.

Donerail’s Withhold Campaign

Donerail is trying to shake up the board and is urging investors to withhold votes from McGill.

CalSTRS Voting Stance

Pension fund the California Teachers' Retirement System, called CalSTRS, said it has voted against all three directors standing for election.

(Reporting by Svea Herbst-Bayliss; Editing by Chizu Nomiyama)