Safe Harbor Marinas acquired

[twistedtree]

This all goes back to Milton Friedman of the so-called Chicago School of economists who wrote a hugely influential essay and book in the 1970’s where he stated that a business’s highest duty was to increase profits for its owners and shareholders. This was later summarized as “Greed is Good”: the idea was that corporate wealth would trickle down to those not of the ownership class. Time has proven that to be an incorrect assumption, but great damage has been done to our society in the meantime. Never more obvious than today when “essential” workers are paid minimum wage and are facing eviction and repossession while financiers and top level corporate executives are shopping for bigger yachts.

Yeh, "trickle down" really caught on with a lot of people. Reality is that a small portion trickles down, but the vast majority gushes up, furthering the economic divide. It's really nothing more than special-interest policies that allow a few people to make a LOT of money off of something.

 

[Northern Spy]

Yeh, "trickle down" really caught on with a lot of people. Reality is that a small portion trickles down, but the vast majority gushes up, furthering the economic divide. It's really nothing more than special-interest policies that allow a few people to make a LOT of money off of something.

Milken and Drexel might have kicked it off in the 80s with "trickle down" Reagonmics, but it wasn't until Clinton signed NSMIA that kicked off the hedge fund LBO explosion.

Screw them all!

Disclosure: my Dad worked at the once proud American Can Co. and I too have lost a lot pension money to private equity firm buyouts.

Sad to see it streching to marinas.

 

[BandB]

Milken and Drexel might have kicked it off in the 80s with "trickle down" Reagonmics, but it wasn't until Clinton signed NSMIA that kicked off the hedge fund LBO explosion.

Screw them all!

Disclosure: my Dad worked at the once proud American Can Co. and I too have lost a lot pension money to private equity firm buyouts.

Sad to see it streching to marinas.

The behavior is nothing even remotely new. Yes, it takes different forms. However, go back to the depression and you'll find wealthy men who built fortunes at the expense of poor struggling business owners. There was always some of the big getting bigger. Then ultimately some of the big get smaller and there are new bigs.

The thing is that unfortunately for every winner there's a loser. They're not even necessarily connected but sometimes they are. Some are benevolent acquirers while others are malevolent. Again, unfortunately, when it's all centered on money, the benevolent are in the minority as the first thing so many companies do and have always done is start cutting back employees of the company they bought. Wrong action but business persons and market analysts have had it ingrained that the way to success is cutting expenses when it's far easier to find success by building rather than cutting down and specifically building volume and margin.

 

[CaptTom]

Some are benevolent acquirers while others are malevolent.

You make some very good points. But this one struck a chord with me. I've always wondered about this.

Whether it's Bill Gates or one of the Rockefellers, it seems history is full of very wealthy people - your "acquirers" - who ruthlessly plundered during that acquisition period, only to try to buy their way into heaven later by giving a lot of it to charity.

I'm thinking, if they're such good people, why did they take it all in the first place? Why didn't they just treat their customers, employees, business partners and suppliers decently and avoid the excess acquisition in the first place?

 

[Northern Spy]

...

 

[BandB]

You make some very good points. But this one struck a chord with me. I've always wondered about this.

Whether it's Bill Gates or one of the Rockefellers, it seems history is full of very wealthy people - your "acquirers" - who ruthlessly plundered during that acquisition period, only to try to buy their way into heaven later by giving a lot of it to charity.

I'm thinking, if they're such good people, why did they take it all in the first place? Why didn't they just treat their customers, employees, business partners and suppliers decently and avoid the excess acquisition in the first place?

Some did give throughout their lives. Others underwent changes along the way. I'm a huge fan of Bill Gates but I would never endorse his way of leading during his early years with Microsoft. I think he changed over the years and much of that I credit to the influence of his wife. I do believe since retiring he has done amazing things for the world and is paying society back every day. Yes, it's better if one can pay back all along the way.

Many of those of us in business are influenced by those we work for and are around early in our careers. I certainly wasn't taught social responsibility by my parents. However, my first job in industry was for a company that did things the right way and then when we were acquired it was by an organization that encouraged us to treat people well.

With public companies, the responsibilities need to be shared by the Boards and the shareholders as well. I don't know many that will support reducing earnings to provide better benefits to employees. Often the company leadership is fighting an uphill battle, but, in my opinion, that's the responsibility of leaders. Still, it's tough to do the right thing, when it may cost you your job. Fortunately, I was never in the compromised position.

I have to state strongly too that just as it requires the support of boards and shareholders, it requires your entire team and as much as anything the support of your spouse. I've observed a lot of business people who were inclined to do better but were influenced heavily by spouses who were money driven in every way. How many spouses will support continuing to pay employees during a pandemic when the money is coming from yours and your spouses pockets? I'm blessed with one who does with no hesitation.

In any company you have a culture and you build it carefully if wise. When challenged you find out how you did. It makes one so appreciative when a CEO comes to you, knowing how you hate to borrow, and her family many times wealthier than you are, and says whatever is needed to keep paying salaries, she'll personally give you whatever you need without anyone else knowing. Or when your top four or five employees tell you they'd be fine not paid for a while or many other managers offer to take pay cuts if it will help their employees. Fortunately we had to do none of the above, but it sure was nice to have those cards in our pocket. Whether you work for them or with them or they work for you, those around you are a large part of who you are.

 

[BandB]

The difference previously was that the wealthy needed a workforce. Companies were very broad based. Giving to hospitals, churches, museums and orphanages benefitted them by making a healthy happy workforce. Furthermore they made money of off energy, transportation and commodities. Things people ( the workforce) needed.

The new wealthy don't really need a healthy middle class to work for them. The goods they sell are more ephemeral. Social media, apps, entertainment. The lower class are as much of their market as is the middle and upper class. They don't even employ the middle class, as much of the coding and assembly is done overseas. They now use their money on driving social change to their liking.

I strongly disagree. Some may not realize who they need, but to have a successful business we absolutely need a workforce and only by being loyal to them to you earn their loyalty. While that workforce does admire your social good deeds, they far more care about how you treat them. There are still plenty of us making money off of tangible goods. Amazon, Walmart, and Target do. We do. We sell to all classes but the lower income class now contains many of the former middle class.

We're not where we need to be on wages for the poor. I still believe no one working 40 hours a week should be living in poverty. However, the magic number is about $20 per hour and even with the increases the past couple of years with companies leading the way I never thought would we have a lot of people between $15 and $20. At least though we're pulling many who were making $10 an hour up to $15.

I've got to say this too. We like to talk negatively about companies today. Well, Sam Walton would have never increased pay and benefits in Walmart as has been done today. I laugh everytime I hear an employer talk about losing employees to Walmart because they pay more. Yet, they don't seem to grasp the obvious solution. We've been attacked by others in retail and in manufacturing for paying too much, as if what we pay is any of their business, and told we'd never make money paying what we do. Well, don't cry for us.

 

[catalinajack]

Norterh Spy, the new wealthy don't need a middle class. Really? You mean workers such as carpenters, electricians, roofers, etc, etc. Ridiculous assertion.

I strongly disagree. Some may not realize who they need, but to have a successful business we absolutely need a workforce and only by being loyal to them to you earn their loyalty. While that workforce does admire your social good deeds, they far more care about how you treat them. There are still plenty of us making money off of tangible goods. Amazon, Walmart, and Target do. We do. We sell to all classes but the lower income class now contains many of the former middle class.

We're not where we need to be on wages for the poor. I still believe no one working 40 hours a week should be living in poverty. However, the magic number is about $20 per hour and even with the increases the past couple of years with companies leading the way I never thought would we have a lot of people between $15 and $20. At least though we're pulling many who were making $10 an hour up to $15.

I've got to say this too. We like to talk negatively about companies today. Well, Sam Walton would have never increased pay and benefits in Walmart as has been done today. I laugh everytime I hear an employer talk about losing employees to Walmart because they pay more. Yet, they don't seem to grasp the obvious solution. We've been attacked by others in retail and in manufacturing for paying too much, as if what we pay is any of their business, and told we'd never make money paying what we do. Well, don't cry for us.

 

[mvweebles]

Marina where I had my boat for years - Treasure Island San Francisco - brought in a large marina management company when it transferred from US Navy to City of San Francisco. Maintenance was under funded. Dock workers and front office staff were seemingly underpaid and generally surly as a result. In my opinion, there just isn't enough money to go around once corporate takes their cut. I'm sure it looks good on paper. Not so much when dock boards are rotting through and someone steps through (yes, happened, though not to me).

CatalinaJack - ironic shout out on King Arthur. I'm making English Muffins from their recipe as I write.

Peter

 

[CaptTom]

Whether you work for them or with them or they work for you, those around you are a large part of who you are.

I'd work for your company in a heartbeat. It's so easy to be cynical in these times when the corporate attitude toward employees seems to be "screw 'em before they screw you."

And thank you for saying it so much better than I can. All I know is that, when I first entered the workforce, the attitude in the quote above was common. Companies, be they Mom-and-Pop or corporate, looked out for their employees, customers AND stockholders/owners.

The change was gradual, and it's hard to pinpoint when it occurred. Every year saw benefits and treatment of employees eroded. Likewise, customers went from valued assets to numbers on a spreadsheet. I suspect the whole thing started with the "greed is good" mentality.

 

[Leatherneck]

I went to work for an employee-owned company in the defense sector in 1991. The founder emphasized employee ownership and had an excellent profit sharing plan. All employees, from the most junior to more senior ones received frequent and generous merit stock awards. As time went on some thought we should go public although the founder was against it. It went through when it was proposed that all employees would get a $10 special dividend if approved. Well, greed overtook common sense and we went public. The past emphasis on sharing profits went by the wayside, it was all about maximizing profits. The generous bonuses went away as did the profit sharing. The only employees getting bonuses anymore were the very senior managers. Sad but true.

 

[Woodland Hills]

Norterh Spy, the new wealthy don't need a middle class. Really? You mean workers such as carpenters, electricians, roofers, etc, etc. Ridiculous assertion.

Are these guys still getting regular pay raises to allow them to keep up with inflation? Or are they slowly slipping from middle class into lower middle or even lower class? Are the medical benefits they get with their employment still sufficient or have high deductibles that make them unaffordable?

Or are they now all reclassified as “contractors” and get no benefits at all and no unemployment when the job ends?

 

[BandB]

Marina where I had my boat for years - Treasure Island San Francisco - brought in a large marina management company when it transferred from US Navy to City of San Francisco. Maintenance was under funded. Dock workers and front office staff were seemingly underpaid and generally surly as a result. In my opinion, there just isn't enough money to go around once corporate takes their cut. I'm sure it looks good on paper. Not so much when dock boards are rotting through and someone steps through (yes, happened, though not to me).

CatalinaJack - ironic shout out on King Arthur. I'm making English Muffins from their recipe as I write.

Peter

Municipal marina management is often on a bid basis and low bid gets it. Now, what kind of service does one expect from a low bidder on a fixed contract?

 

[Seevee]

When we started our business it was as a hobby for me. As it grew it's mission became simple and that was to provide good jobs to employees. Servicing customers was part of it as were vendor relationships. However, we do a business plan every year which includes a mission statement. The mission has never included profits or money as part of it.

We've been asked if we'd ever sell and it's a resounding "no." We can't accomplish our goals if we don't own and control it. When younger I thought anything was for sale at a price, but our business isn't, only because it's not about business.

There were and likely are marina owners who got into it because they wanted to be on the water and service boaters and own their own marina. Making money was important only to allow them to fulfill their dream of owning it. However, sometimes the time comes that it's time to move on or an offer overwhelms you. When it's a family business, sometimes the kids would rather have the money than the business. Many businesses don't have a succession plan and selling is the only feasible plan.

I don't know how the sale will turn out for the marinas. Will the buyers be looking to cut costs and reduce service in the process or are they customer centered based on their other businesses? Time will tell us.

BandB,


Very commendable comment and a great business plan. Bet you love your business and the people that make it work.


Mine was similar, but on a smaller scale. However, my goal was to provide a reasonable income first, because without I'd not be able to continue the business. Ran great for the 10 years I had it and sold it to pursue and entirely different line of work. Sold to a great guy and some of my first employees stay with him for the entire time he had the business.


Miss my business, but wouldn't think of going back to it with today's environment. Besides, I'm a bit older than you, retired early, and have no desire to work... period. (but I sure keep busy). You're just a kid! Keep up the good work!

 

[Alaskan Sea-Duction]

Another One Bites the Dust!!

https://www.tradeonlytoday.com/indu...Uk9w&utm_content=96562612&utm_source=hs_email

 

[BandB]

BandB,


Very commendable comment and a great business plan. Bet you love your business and the people that make it work.


Mine was similar, but on a smaller scale. However, my goal was to provide a reasonable income first, because without I'd not be able to continue the business. Ran great for the 10 years I had it and sold it to pursue and entirely different line of work. Sold to a great guy and some of my first employees stay with him for the entire time he had the business.


Miss my business, but wouldn't think of going back to it with today's environment. Besides, I'm a bit older than you, retired early, and have no desire to work... period. (but I sure keep busy). You're just a kid! Keep up the good work!

Well, we retired in 2012 and I just decided to buy a couple of small stores as a hobby. Still with the growth, only worked occasionally until the Pandemic. Then it became every day as we figured out how to counter it. Now is still most days as cruising isn't an option. Within a year or so hope to be mostly retired again.

 

[BandB]

https://www.tradeonlytoday.com/indu...Uk9w&utm_content=96562612&utm_source=hs_email

A single marina only makes sense when you think of it as a job. You own it instead of working for someone else and perhaps make a little more than you would otherwise. For marinas to be a good investment, is like many small businesses, it requires owning and operating more than one.

 

[Alaskan Sea-Duction]

A single marina only makes sense when you think of it as a job. You own it instead of working for someone else and perhaps make a little more than you would otherwise. For marinas to be a good investment, is like many small businesses, it requires owning and operating more than one.

True, but in this case "Southern Marinas" seems to be acquiring more than one marina and using them as a "investment"

 

[Seevee]

Would be nice to have a directory of small, locally owned marinas.

 

[caltexflanc]

I am more of a Peter Drucker disciple. Getting back to the comment about Friedman's dictum, I'd counter that with Drucker's much more concise and true "The purpose of a business is to create a customer". Notice that's "THE purpose". Everything else flows from that one essential truth.

 

[BandB]

True, but in this case "Southern Marinas" seems to be acquiring more than one marina and using them as a "investment"

Absolutely. Same strategy we'd have. At 10 marinas, they can make their marinas worthwhile investments.

Things become simpler, easier for you as you acquire more. We can acquire businesses today in our areas of experience and we know what it takes to make them more profitable. As a simple example, we acquire a hardware store with sales of $100 per square foot. We know that next year it will do at least $130 per square foot. Generally employees are shocked when they see all the increased inventory brought in and see the additional employees, but it works and we know what works. By the time one acquires their 10th marina they should know. Unfortunately for many, it's cut back on expenses. I don't follow that philosophy. My first question would be what can we do to increase revenues, what else can we offer. How do we get a better understanding of our business. Whatever it is though, I'd think by 10 they would have established methods to operate marinas.

 

[markpierce]

My optometrist father developed a mobile-home park in Oakley California sixty years ago. It was "touch-and-go" until it became a going concern. Once that happened, he sold and invested in vacant land that someone else later developed single- and multi-family housing.

https://eaglecity.squarespace.com/

 

[CaptTom]

"The purpose of a business is to create a customer". Notice that's "THE purpose". Everything else flows from that one essential truth.

I'd never heard that, thanks!

I wonder why he chose the word "create." To me, it would be "serve." I'd think the best business is the one where the customer (demand) already exists, and you don't have to create it.

But either way, it makes a lot more sense to me than some of the BS I hear coming from MBAs.

 

[Knot Salted]

Quarterly report Due .
Quality? Problems? Reputation? ... huh?
Next Quarterly Report will be Due...

 

[MOJO]

Here's a link to Sun's rationale regarding the acquisition of Safe Harbor Marinas. Some interesting statistics: https://suncommunities.gcs-web.com/static-files/62ff763a-415f-411d-95b8-cda9d21441e2

 

[sndbowen]

So sad to hear.

We've been at a Safe Harbor Marina for a couple of months and just learned that they have let the general manager go. This is a guy that has been working at this marina since he was a young guy. He was there when we had our first boat at the marina in 1983.

An absolutely wonderful person

Too sad.............

 

[twistedtree]

Here's a link to Sun's rationale regarding the acquisition of Safe Harbor Marinas. Some interesting statistics: https://suncommunities.gcs-web.com/static-files/62ff763a-415f-411d-95b8-cda9d21441e2

Holy crap, $2.1B?


And I love this one - "70% of Safe Harbor's marina's are located is coastal markets". Where the heck else would they be?


I think I'll have nightmares after reading that. PTBS - "Post traumatic business syndrome". Or perhaps PBBSS - "post business BS syndrome"

 

[twistedtree]

We've been at a Safe Harbor Marina for a couple of months and just learned that they have let the general manager go. This is a guy that has been working at this marina since he was a young guy. He was there when we had our first boat at the marina in 1983.

An absolutely wonderful person

Too sad.............

I'm sure they are realizing synergies, eliminating duplication, and working smarter, not harder.


See, I speak "business".

 

[BandB]

Holy crap, $2.1B?


And I love this one - "70% of Safe Harbor's marina's are located is coastal markets". Where the heck else would they be?


I think I'll have nightmares after reading that. PTBS - "Post traumatic business syndrome". Or perhaps PBBSS - "post business BS syndrome"

And nearly all of them are on the water. lol

As to the $2.1 billion, only about $200 million cash. Add to that $750 million from new debt and $222 line of credit so you have $1.2 to old shareholders but only $200 million from the buyer. Then you assume debt of $808 million and exchange stock for $130 million. So the $2.1 is a bit smoke and mirrors.

 

[Hippocampus]

Believe initially safe harbors holdings were mostly on lakes and rivers.

Have had good luck at the other biggie (not as big though) IGY. They emphasize Mega Yachts but the one in St.Lucia treated our small boat 46’ well and the ARC seems to like them as well.
In the car/small truck business believe there’s more profit in the big units such as pickups and SUVs. Hope that mentality doesn’t penetrate these big Marina chains. That would force us small guys out. The statements about “community “ makes me suspicious that’s going to occur. I just want a berth and good yard workers. Don’t need a pool or other amenities.