MarineMax Acquires Northrop Johnson; Now Themselves Being Acquired

A continuation of the same strategy when MarineMax acquired Frazer Yachts last year. Whatever strategy that is. Personally I think Frazer and Northrop & Johnson will become more like MarineMax than vice versa.

I don't like it. Didn't like the Fraser deal. Can't fully say why I don't like them, but just something about it and reducing the independent companies in the market.

Fraser hasn't changed.

Changes don't usually come until Year Two or later. Year one they typically do as they said they would and don't do much to impact things.

I know a number of people who sold their companies and stayed on-board and not a single one of them lasted to the end of their contract. In the vast majority of cases the company that bought it will eventually become the dominant personality. Business acquisitions are not made to leave companies unchanged. I'm not saying they shouldn't. They just don't.

Business acquisitions are by nature designed to lead to change. The Buyer is saying the business is worth more to them than the Seller says it's worth to them. Why? Because of something they intend to change.

Interesting deal. NJ offices were owned as a franchise.

Could we see a MM boat builder purchase in the future?

Looking like Marinemax themselves are being acquired now by an investment company called Donerail for 1 billion dollars ($35 a share).

Another private equity acquisition.
If we're not careful 30 PEs are going to control everything.

Quite true.
PE companies now own a surprisingly high percentage of middle market and big market corporations. PE companies are getting squeezed due to the fact that PE companies need to unload businesses after several years of ownership in order to give profit back to investors in PE funds. But nowadays the only buyers are other PE companies and they don't want to overpay. PE companies are sitting on thousands of businesses they want to offload so now they are doing a weird shuffle where they raise a fund to buy out the original investors -- called continuation funds. PE is becoming a strange industry where businesses are being shuffled back and forth between PE companies.

The typical PE business model emphasizes short term gains at the expense of long term performance. Be interesting to see when/if the era of cheap money ends how PE performs.