Monomoy Capital Partners has completed its take private of West Marine, an omni-channel specialty retailer, for approximately $337 million. Monomoy acquired West Marine through its third fund, Monomoy Capital Partners III LP, which close in June 2016 with $767 million of capital.
West Marine (NASDAQ:WMAR) is the largest specialty retailer of boating supplies and accessories, with more than 249 stores located in 37 states and Puerto Rico. The company carries more than 175,000 aftermarket 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, led by CEO Matt Hyde, has more than 4,000 employees 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.
“We are excited to welcome West Marine to the Monomoy portfolio,” said Daniel Collin, Monomoy’s Co-Chief Executive Officer. “We have long admired West Marine and the unique value the company provides for its loyal customers and world class associates. We look forward to working with the company’s management team to ensure that West Marine continues 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).
Monomoy’s acquisition of West Marine marks the firm’s third middle market investment of 2017, following the February 2017 acquisitions of Asheboro, NC-based Klaussner Furniture Industries, a manufacturer and distributor of furniture and furniture components; and Friedrich Holdings, a San Antonio, TX-based manufacturer of air-conditioning products for consumers and commercial end users.
Bank of America and Pathlight Capital provided financing to back the buy of West Marine. Guggenheim Securities was the financial advisor to West Marine and Jefferies was the financial advisor to Monomoy. Kirkland & Ellis provided Monomoy with legal counsel and Grant Thornton provided financial and accounting diligence.
© 2017 Private Equity Professional | September 15, 2017
