Donerail dials up pressure on MarineMax

Activist investor Donerail Group is intensifying its pressure on MarineMax, urging the US yacht retailer and marina operator to replace senior leadership and explore a sale of the business, according to a Reuters report published this week.

Reuters said the Los Angeles-based hedge fund, which holds about 4 per cent of MarineMax stock, has criticised management for “poor capital allocation and flawed execution” under chief executive Brett McGill, who succeeded his father and company founder Bill McGill in 2018.

The company has replaced several board members in recent months, including removing its chief financial officer from directorship, but the measures appear to have fallen short of investor expectations.

More notably, Donerail co-founder Will Wyatt has reportedly held multiple meetings with MarineMax’s leadership, pushing for change ahead of next year’s board elections, when McGill and two other directors are due for reappointment. Another investor, Levin Capital, has also urged the company to review “strategic alternatives”.

The move marks an escalation in Donerail’s engagement with Florida-based MarineMax’s chief executive, who has sought to reposition the company from a boat retailer into a fully integrated marine services group. This follows a series of shareholder challenges to MarineMax’s strategy, particularly its 2022 acquisition of Island Global Yachting (IGY) for around $480 million, a deal that expanded the company into the superyacht marina sector but has since proven difficult to integrate.

The integration came under publicly visible scrutiny last summer when Andrew Farkas, IGY’s founder and now chair of Island Capital Group, issued an open letter to MarineMax shareholders offering to buy back up to 100 per cent of IGY. Farkas said the marina group was “losing its competitive edge” under MarineMax ownership and argued that the transaction could close within 60 days.

“During the time I ran the business, I oversaw the acquisition and development of every marina in the IGY portfolio,” Farkas wrote. “I continue to believe in the synergy between IGY and MarineMax’s yacht and service businesses, but those benefits have yet to be realised.” He added that IGY has failed to expand its portfolio since the sale, while competitors have raised capital and acquired new assets. 

MarineMax said it was “in receipt of the letter from Island Capital Group and will review it,” adding that its board “regularly evaluates bona fide opportunities to enhance shareholder value.”

Farkas’ proposal valued the IGY portfolio at a double-digit EBITDA multiple and would allow MarineMax to retain a minority interest while using proceeds for share buybacks or balance-sheet deleveraging. It also offers to settle a $67.7 million earnout payment still owed to Island Capital.

Before Farkas’s proposal, the Mexican Navy assumed control of IGY’s Marina Cabo San Lucas after a lease renewal fell through in 2023, reportedly reflecting wider governance and operational challenges.

The twin pressures from Donerail and Farkas are pertinently indicative of the growing shareholder unease with MarineMax’s direction. Since McGill’s appointment, the company’s shares have climbed from about $17 at the end of 2018 to around $27 today, but have lagged the wider market and fallen sharply from their 2021 peak of roughly $57, leaving the company valued at about $580 million.

Levin Capital has also argued that MarineMax’s corporate structure, combining retail, brokerage and marina assets, now obscures value. In 2024, OneWater Marine reportedly offered $40 per share in an all-cash proposal valuing the company at $2.5 billion, which the board rejected.

The noise comes amid growing investor appetite for marina infrastructure too. OneWater aside, Blackstone’s $5.7 billion purchase of Safe Harbour Marinas earlier this year indicates that parts of the MarineMax portfolio would attract fresh bids should the board open the door to negotiations. But with other funds reportedly preparing sales of similar assets, valuations could be tested in an increasingly competitive market.

MarineMax did not immediately respond for comment.

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