The last couple of years have seen an upswing in dealer consolidation. An improving market, an aging owner base and easier access to capital have made it an attractive time to buy a boat dealership or marina, especially for those who can realize some economies of scale.
In the marina segment, we’ve seen Safe Harbor and Suntex scooping up marinas around the country. On the dealer side, the industry has experienced a similar wave. OneWater Marine Holdings – formed with the merger of Singleton Marine Group and Legendary Marine in 2014 – has continued to acquire dealers, now boasting more than 40 locations.
MarineMax, the nation’s largest boat dealer, has been making fewer acquisitions, but those they have made have been significant, adding two of the largest independent dealers to its holdings in the last year in Russo Marine and Hall Marine Group, both longtime Top 100 dealers.
You can add another player to that market with Marine Sales Group.
Slow, steady growth
In March, the Tennessee-based dealer brought Top 100 dealer Lake Viking Marine, based in Gallatin, Mo., into the fold.
It’s the second acquisition for Marine Sales Group, which added Kentuckiana Yacht Sales in 2013, but won’t be the last, says Principal Mike Tutor.
Tutor took over what was then known as Marine Sales of Pickwick in 2008 and since then the company has worked on refining its systems to make the company more scalable. Based on his experience owning companies in other industries, Tutor believes the best way to keep the company healthy is to continue to grow.
If you’re not growing in scale, it’s difficult to keep your best employees, to offer comprehensive benefits and to keep marketing, IT and other services at peak efficiency, Tutor said.
That said, Marine Sales isn’t in a hurry to grow. The company had looked at five or six other dealerships over the last two years before acquiring Lake Viking.
“We’re not going to try to buy a bunch of dealerships in a short amount of time,” Tutor said. “If we could acquire one every six to 12 months, that would be great.”
Like many dealerships these days, Lake Viking was going through a generational change in ownership. Current general manager Randy Tague, son of owner Larry Tague, will stay with the dealership to run it. Those types of well-established businesses are the prime targets for Marine Sales.
“We liked his culture, and it was easier that he sells Cobalt and Manitou and we sell Cobalt and Manitou,” Tutor said. “At the same time, one of the things that made it attractive was that you had a family business that was going through a generational change and Randy wanted to stay with the business. It improved our volumes for our two primary lines and it also gave us a chance to bring in a partner who has a whole bunch of drive. He’s been brought up in the industry, he’s passionate about it, he’s got all the stuff you look for in a great partner.”
The situation was similar for Kentuckiana Yacht Sales, with owner Don Toby looking to retire and son Ken Toby staying on board as the general manager. Both dealerships were large enough to offer value beyond the owners.
“Sometimes the business is just not really acquirable,” Tutor said. “It’s hard to acquire because it’s a one-man band.”
Beyond that, there has to be a strong culture and team that can be part of Marine Sales going forward.
“It’s got to be something that the chemistry’s right and the people are right,” Tutor said. “We’re going to find more dealerships just like the one we’ve just done. I’m not necessarily hung up on the brands, I’m not necessarily looking for if they have a marina or not. Lake Viking is the first step in having a smaller marina.”
In 2015, the company also acquired a business two miles from its Pickwick location, Pickwick Watersports. Along with five acres of property the dealership owned next to that businesses, that deal has allowed Marine Sales to add a second Pickwick location. The original Marine Sales location offered visibility, but no space to grow.
The company expanded the existing Pickwick Waterports building and built a 17,000-square-foot building for its Cobalt and Mastercraft lines, moving into the new facility in March.
“It’s a great time to be in the boating business right now. I started in as bad a time as you possibly can,” Tutor said. “I just want to have a good, strong business that will make our customers happy and support our brands.”