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Activity in mergers and acquisitions continued to be strong across the marine industry during the past six to nine months, with sizable deals announced in segments that include brokerage, technology integration, and parts and accessories.

Some executives involved in prominent deals told Soundings Trade Only that they expect the pace of acquisitions to continue despite economic uncertainty in the months ahead, while others said factors such as high inflation and pressure on earnings will likely reduce the appetite for certain types of acquisitions in the next six months to a year. Overall, these industry leaders said in late June and early July that they saw no indications of acquisitions slowing dramatically in the foreseeable future. Instead, they said, the industry and its customer base are well-positioned to weather a significant economic downturn or recession.

“Even if there’s a recession, we think it’s going to be different than 2008 and 2009,” says Austin Singleton, founder and CEO of OneWater Marine, which owns and operates dealerships throughout North America. “We’re not going to have this massive inventory to clog the channel. There’s just not enough inventory out there to trigger the pain we all felt in 2008 and 2009. We’re going to be prudent going forward, but we plan to continue our pace of acquisitions.”


Acquisitions and More Acquisitions

OneWater Marine’s two biggest recent acquisitions were the branded parts-and-accessories provider T-H Marine in early December and the superyacht sales, charter and management firm Denison Yachting in April. Other significant transactions include Yamaha buying Siren Marine in January, then battery developer ELEO Technologies in April; Suntex Marinas buying Westrec in a $2.5 billion deal in February; Canadian powersports company FortNine buying Defender Industries in February; and MarineMax acquiring Intrepid Powerboats in November, followed by Superyacht Management SARL in April.

Still more acquisitions include TPG Hotels, Resorts and Marinas acquiring Conanicut Marina and Taylor Point Boat Yard in January; Consolidated Electronics Distributors buying Florida wholesaler Jaytron Marine Electronics in March; OEM and aftermarket components supplier Dometic acquiring Treeline Capital, which offers aftermarket power solutions, in March; marine and powersports dealer Power Lodge acquiring Miller Marine, one of the largest single-point boat dealerships, in May; and ePropulsion acquiring a majority stake in ePropulsion UK in June.

Singleton says OneWater’s acquisition of T-H Marine “was a big one for us because it was a significant expansion into parts and accessories. They’re a manufacturer-distributor-importer of products, and they have a track record of doing acquisitions themselves and will continue to do acquisitions going forward. We expect them to complete probably two to four acquisitions a year on the P&A side, and we’ll do four to six acquisitions on the dealer side.”

One of the earliest deals in 2022 was Yamaha’s purchase of Siren Marine, finalized in January.

One of the earliest deals in 2022 was Yamaha’s purchase of Siren Marine, finalized in January.

T-H Marine was one of 27 acquisitions that OneWater has completed since 2016, when the company set a plan in motion to grow through acquisitions. It started out with Goldman Sachs as a partner until it could do acquisitions through free cash flow, and is no longer being slowed by an original hurdle of integrating new companies into its software system for day-to-day management. With every dealership it has purchased, Singleton says, OneWater has learned how to make the acquisition process easier going forward. “We have a track record of buying dealerships and being able to double the EBITDA in 24 months,” he says. “We’ve been double-digit, same-store sales for the last five years.”

And, he adds, he doesn’t expect the acquisition pipeline to dry up at all in the dealership segment. Economic news may keep changing, but the age bracket of many top dealership owners will not. Quite a few of those principals are members of the generation that is ready to retire but perhaps still want to have at least a partial hand in the business they built. For that reason, Singleton sees a steady stream of dealers who will be interested in having OneWater Marine take over such tasks as human resources and floorplan financing to ensure continued operations and a strong legacy going forward. 

“These guys are running the best dealerships in the best boating markets,” he says. “They all have principals well north of 55, probably north of 60 or even 65. They have a lot of energy left, but there’s still that concern about what things look like five or 10 years from now.”

Intrepid president Ken Clinton (left) and MarineMax CEO Brett McGill. The Intrepid acquisition brings MarineMax into the semicustom fishing boat segment.

Intrepid president Ken Clinton (left) and MarineMax CEO Brett McGill. The Intrepid acquisition brings MarineMax into the semicustom fishing boat segment.

The Tech Integration Space

Ben Speciale, president of Yamaha U.S. Marine Business, says the company’s Siren Marine purchase was part of its CASE strategy to make boating more connected, autonomous, shared/service and electrified. “The integration has been better than I anticipated,” Speciale says. “The team up there is very smart.”

Yamaha is still in phase one of integrating Siren into Yamaha’s systems, he says, with that effort expected to be complete by the end of the year. Phase two, which will include over-the-air updates for software and other technology, is expected to happen within 18 to 30 months. The goal is to put more robust information into Siren’s digital communication modules, which need the ability to communicate with Yamaha software. The architecture is being built now to make that level of communication possible, including user interfaces for dealers.

“Technology should make things easier to operate, not more complicated,” Speciale says. “If you think about what it means to be connected, it’s about how you bring the whole ecosystem together so that when I go out on a vessel, I’m much more aware before I get there. Maybe my dealer has done some preventive maintenance so the water impeller isn’t failing. Maybe we are getting maintenance in before the season starts. That way, the boater spends more time using the product for its intended use. I think there’s a big opportunity to do that.”

Speciale says that in terms of mergers and acquisitions going forward, he expects activity from investment firms to slow because of rising interest rates. While Yamaha makes acquisitions to gain technologies for a strategic fit and will continue to look for those opportunities, he says, investment firms “buy companies to sell companies at some point.”

Electric outboard manufacturer  ePropulsion acquired a  majority stake in British distributor ePropulsion UK in June.

Electric outboard manufacturer ePropulsion acquired a majority stake in British distributor ePropulsion UK in June.

His thinking about the marine industry overall for the next six months to a year is that with high inflation, retail tends to slow. At the same time, inventory backlogs are so substantial that even if there’s a slowdown in retail, it shouldn’t have a big impact. In addition, he says, Yamaha’s research shows that eight out of 10 first-time buyers who came in during the pandemic intend to stick with boating.

“That’s why we think making sure we have great technicians out there, leveraging these technologies to have a better boating experience — we want new boaters to get proficient faster, and we want the aging population to buy one more boat,” he says. “We think that’s what these types of things can do for us.”

Bigger-Boat Thinking

Chuck Cashman, chief revenue officer at MarineMax, says the company’s acquisition of Intrepid Powerboats is “going awesome” and helping MarineMax move into the market for semicustom, premium fishboats. Intrepid’s goal was to build bigger boats. With the MarineMax funding, it is now working on the 51 Panacea — to start. “We’re going to try and give them resources to improve the cadence of new models coming out so they can grow and evolve,” Cashman says. “They have a loyal, passionate owner base. I’ll be shocked if they don’t have a double-digit amount of contracts before that boat is built.”

 Northrop and Johnson was one in a series of acquisitions that MarineMax made in the large-yacht segment, culminating in the addition of Superyacht Management SARL in April.

Northrop and Johnson was one in a series of acquisitions that MarineMax made in the large-yacht segment, culminating in the addition of Superyacht Management SARL in April.

In the large-yacht segment, Cashman says the acquisition of Superyacht Management SRL, also known as SYM, will add to the MarineMax portfolio with its megayacht clientele. MarineMax previously acquired the large-yacht firms Fraser in 2019 and Northrop and Johnson in 2020.

“Within the two portfolios, Northrop and Johnson did not have a yacht-management division,” he says. “SYM is superyacht management, and they do a little more than that, but that’s the foundation of their company. It’s part of the package that Northrop and Johnson needed to round out, and it’s going phenomenally well.”

Cashman calls the demand for yacht management services “incredible” among owners of boats about 80 feet and larger. Even within that segment, he says, 42 percent of MarineMax customers are buying for the first time. “We’re seeing more new boaters enter at a bigger boat,” he says, adding that he believes the trend will hold steady for at least the next 18 months, even amid the economic uncertainty. “The people with money are going to have money,” he says. “The entry-level people may pause a little more. We haven’t seen that yet, but you anticipate it.”

Cashman adds that MarineMax has been “relatively consistent” in its appetite for acquisitions, and he sees no change in that posture on the immediate horizon. However, he says, he suspects there will be economic pressure on companies that might be in the market to be acquired but won’t be making as much money — and whose owners, therefore, won’t feel as if they’re as well-positioned to sell as they were a year or two ago.

“Where I see the challenge ahead is that with pressure on earnings, is the seller going to feel like they got the best value for their company?” he asks. “Maybe yes, maybe no. We’ll see. We’ve done acquisitions in good times and bad. In good times, it’s a good time to take your chips off the table, at peak earnings.”

Overall, he says he doesn’t anticipate a major recession — “I don’t think it’s going to be very big, to be honest” — because the health of the American consumer has never been stronger. What’s happening right now in terms of economic challenges, he adds, is not the same as what happened in the Great Recession. “We see our customers’ financials,” Cashman says. “In 2009, they were borrowing 120 percent against their house and then closed on a second mortgage almost simultaneously. Right now, everybody is buying cash. The real-estate market is insane. Nobody is borrowing money against real estate. The American consumer is healthy financially.”

Yes, he adds, the headlines about lower-income Americans struggling are real and are likely to continue, but those folks have never been the core of the client base that goes out and buys a boat. “The lower class is still under pressure, and that hasn’t changed. I wish it would,” Cashman says. “But for our customers who support the industry, they’re very healthy.” 

This article was originally published in the August 2022 issue.



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