A Dallas company that operates 101 marinas nationwide is merging with a real estate investment trust in a cash and stock deal valued at $2.11 billion.
Safe Harbor Marinas announced the deal Tuesday with Sun Communities Inc., a publicly traded REIT that owns or operates 426 manufactured home and RV communities in 33 states and Canada.
“We have spent a number of years getting to know Sun and are impressed with their leadership team and track record of consistently growing value for all their stakeholders," said a statement from Baxter Underwood, CEO of privately owned Safe Harbor. It operates seven marinas in Texas, including two in Grapevine and one each in Lewisville, Flower Mound, Austin, Pottsboro and Montgomery.
In January, Bloomberg reported that one of Safe Harbor’s key investors, American Infrastructure Funds, was interviewing advisers to explore a sale of the company. American Infrastructure Funds is the majority owner of Safe Harbor, and Koch Real Estate Investments, an affiliate of Koch Industries Inc., has owned a minority stake since July 2018.
Other investors in the marina operator are Weatherford Partners and Guggenheim Partners.
Safe Harbor describes itself as the world’s largest owner and operator of marinas, with 40,000 members in its network. In 2019 it added Hideaway Bay Marina in Georgia and Newport Shipyard in Rhode Island to its portfolio. Its properties contain 30,000 wet slips and moorings, 8,300 dry racks and 9,500 outdoor storage spaces.
The company’s revenue grew from $219.8 million in 2018 to $278.7 million in 2019, according to audited financial statements filed with the U.S. Securities and Exchange Commission.
Under terms of the deal, Michigan-based Sun Communities will pay $1.172 billion in cash and $130 million in stock and take on $808 million of Safe Harbor’s debt.
Underwood said Sun Communities' scale will help Safe Harbor continue to expand its marina holdings. Sun Communities’ revenue totaled $1.26 billion in 2019, up 12% from the year before. Its profit grew to $177 million.
“Safe Harbor will operate independently from Sun’s other businesses, but we will benefit from their tremendous strength,” said a statement from Underwood, who will remain as Safe Harbor’s CEO.
Sun Communities CEO Gary A. Shiffman called the deal “a major strategic decision." Sun views marinas as a predictable and recurring revenue stream, and the company said 74% of Safe Harbor’s gross profit is from storage and commercial lease income.
“We have studied the marina industry and specifically Safe Harbor for a number of years and have gotten to know the team very well,” Shiffman said. "We could not have chosen a better partner to execute this important growth initiative.”
The transaction is expected to close by the end of the year.
