West Marine, an omni-channel specialty retailer, has signed an agreement to be acquired by Monomoy Capital Partners for $12.97 per share in cash which represents a total equity value of $338 million.
West Marine (NASDAQ:WMAR) is the largest specialty retailer of boating supplies and accessories, with more than 260 stores located in 38 states and Puerto Rico. The company carries more than 100,000 products, ranging from rope (its original product – see below), to the latest in marine electronics, technical apparel, footwear and accessories. In addition to its retail stores and Port Supply wholesale divisions, the company also sells through its mail order and an e-commerce divisions. The company is led by CEO Matt Hyde and is headquartered south of San Jose in Watsonville, CA (www.westmarine.com).
In 2016 West Marine had total revenues of $702 million and an EBITDA of $37 million which equals a 9.1x purchase price multiple and .48x multiple of 2016 revenues.
Randy Repass, Chairman of the Board, founded the company in a garage in 1968 as a mail order seller of nylon rope under the name West Coast Ropes. The fledgling company opened its first 
store in Palo Alto in 1975 and began stocking other boating supplies such as anchors and fenders. In 1977, the company acquired some of the assets of Boston-based West Products, then a well-known mail-order business, and changed its name from West Coast Ropes to West Marine Products. In 1987, the company introduced its first master catalog— 330 black-and-white pages packed with boating gear. The company went public in 1993 and merged with one of its oldest competitors, E&B Marine, in 1996. In 2003 West Marine acquired the retail and catalog divisions of long-time competitor BoatUS.
Mr. Repass has entered into a voting agreement whereby he and his affiliated entities have agreed to vote shares representing approximately 20% of the company’s voting power in favor of the transaction.
“We are excited to welcome West Marine to the Monomoy portfolio,” said Daniel Collin, Co-Chief Executive Officer of Monomoy Capital Partners. “We have long admired West Marine and the unique value the company provides for its loyal customers and world class associates. We strongly support West Marine’s vision for the future, strategic initiatives, and culture. We are excited to invest in and work together with the company’s management team to continue to lead the industry.”
Monomoy makes control investments of debt and equity in companies with at least $150 million in sales, $15 million of EBITDA, and enterprise values of up to $500 million. Sectors of interest include industrial, distribution, and consumer. The firm is headquartered in New York (www.mcpfunds.com).
Guggenheim Securities was the financial advisor to West Marine and Jefferies was the financial advisor to Monomoy.
The transaction, which has been unanimously approved by West Marine’s Board of Directors, is expected to close in the third quarter of this year.
© 2017 Private Equity Professional | June 30, 2017
