Selling a Marina

May 19th, 2016

There IS an effective strategy to selling a marina that will guarantee a serious Seller the best possible price in the shortest amount of time. The secret is to be patient and to be thorough in preparing the facility to go to market. That is true whether the game plan is to market aggressively to the public or to sell it quietly  “under the radar”. Going to market before preparatory work is completed can erode the Seller’s negotiating position and leave serious money on the table.

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Preparation will include (but is not limited to) all the following:

  1. Environmental Review and remediation if necessary
  2. Accounting Adjustments identified and implemented
  3. Financial Analysis completed
  4. Deferred Maintenance analyzed and costed
  5. Income Streams clarified and categorized
  6. Customer Base analyzed
  7. Historical Profitability trended
  8. Future Profitability projected
  9. Clear Title verified
  10. Defensible Value determined and supported
  11. Confidentiality established among all parties
  12. Game Plan for the sale created and implemented

These are only a few as each category will differ in magnitude and relevance depending on the facility. The process in each of the categories should be managed by an objective third party expert who is familiar with operations and protocols at comparable facilities. The Seller should be challenged to look at each item through the eyes of a Buyer so reasonable value and “sell-ability” can be established across the board. The process can usually be completed in a couple of weeks. In some cases where major adjustments are necessary, it may take a year so changes have time to manifest on the P&L.  The Seller should realize that every dollar of profitability added to the package can return $12 to $14 dollars in value to the deal.  In other words, $100,000 in Net Operating Income will translate to $1,000,000 to $1,250,000 of additional value in today’s market!   It is a critical exercise to find every dollar of legitimate profits, and you need a broker who knows how to uncover the hidden value.

After analyses are completed and adjustments made, an effective and professional package is needed to showcase the facility in its best possible light.  An Offering Memorandum and discussions with the Seller’s broker are determining factors upon which Buyers will formulate an initial opinion, so each must be informative, accurate and compelling.  This basic strategy, expanded to address all of the relevant issues at the Seller’s marina, has the best likelihood of delivering an outstanding transaction.

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