Matrix’s Outdoor Recreation and Marine Investment Banking Group
William O’Flaherty, Managing Director; Matt Oldhouser, CPA, Vice President; Jason Keyser, CFA, Analyst; Hayden N. Daniel

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Overview

Welcome to our first market update for the Outdoor Recreation and Marine sectors. In many ways, the timing of our update couldn’t have occurred at a more unique or opportune moment in the lifecycle of these industries. In this issue, ahead of our annual trip to IBEX, we have zoomed in on the Marine market. With the changes over the past few years, we thought it would be helpful to take stock of what has occurred in the market, where we are today, and how this information can influence decision making moving forward.

2024 can perhaps best be characterized as a reset for participants across the Marine landscape. After three-plus years of nearly record levels of growth, most stakeholders saw 2024 as an opportunity to recalibrate on more normalized levels of demand. Macroeconomic factors, most notably around higher interest rates, matched with higher levels of marine dealer inventories, have led to an environment where wholesale powerboat shipments are down approximately 20% year-over-year, with retail unit sales down approximately 10%. In a market where north of 60% of boat owners have a household income of $75,000 or less, the Federal Reserve’s economic policies aimed at stemming inflation have hit particularly hard for buyers looking to finance these relatively big-ticket purchases.

Despite these headwinds and resulting lower sales volumes, we’ve seen remarkable resiliency across the marketplace. Most organizations relied on informed forecasting to manage costs and those that did have been rewarded, at least in the public markets, with valuations that represent modest, if any, erosion. Additionally, we’ve observed resilience in the M&A markets, with a number of transactions crossing, or on the path to crossing, the finish line this year so far. Not surprisingly, interest tended to be greater in service-based versus product-based businesses with the service organizations remaining more resilient in the face of declining overall volumes.

With analyst and marketplace sentiments more optimistic for 2025, matched with what seems to be softening inflation (and shrinking interest rates), we expect many parties to begin assessing capital needs for potential growth opportunities. Furthermore, while we don’t expect next year’s demand to necessarily reach levels seen during the pandemic, we nevertheless believe next year’s anticipated rebound to allow many business owners to reestablish earnings momentum and consider a potential exit or sale. In conversations with many organizations, the demand reset of 2024 has helped the marketplace recalibrate growth expectations after years of misalignment over sustainable levels of earnings.

State of Marine Operations – Key Industry Data

Key Marine Macroeconomic Indicators

Operational Indicators and Measurements

Market Data & Updates

Marine Public Trading Group

Market Valuation & Performance

 

Key Recent Transactions / Deal Spotlight

Recent Transaction Overview

Sources: Capital IQ, various industry publications

 

Acquisition Spotlight: Patrick Industries Acquires Sportech, LLC

What We’re Reading – Interest and Growth in Electric Alternatives

Disclaimer

The contents of this publication are presented for informational purposes only by Matrix Capital Markets Group, Inc. and MCMG Capital Advisors, Inc. (“Matrix”), and nothing contained herein is an offer to sell or a solicitation to purchase any of the securities discussed. While Matrix believes the information presented in this publication is accurate, this publication is provided “AS IS” and without warranty of any kind, either expressed or implied, including, but not limited to, the implied warranty of merchantability, fitness for a particular purpose, or non‐infringement. Matrix assumes no responsibility for errors or omissions in this presentation or other documents which may be contained in, referenced, or linked to this publication. Any recipient of this publication is expressly responsible to seek out its own professional advice with respect to the information contained herein.

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