Acquisitions

12 Months Ended

Sep. 30, 2021

4.	Acquisitions

In the years ended September 30, 2021 and 2019, the Company completed acquisitions of multiple businesses in the United States. No acquisitions were completed during the year ended September 30, 2020. The results of operations of acquisitions are included in the accompanying consolidated financial statements from the acquisition date forward. The purchase price of acquisitions was allocated to identifiable tangible assets and intangible assets acquired based on their estimated fair values at the acquisition date, with the excess being allocated to goodwill. The valuation of tangible assets and assumed liabilities for the acquisition of Stone Harbor Marina and PartsVu is preliminary as the acquisitions are subject to certain customary closing and post-closing adjustments.

Fiscal Year 2021

Walker Marine Group Acquisition

On December 31, 2020, we acquired substantially all of the assets of Walker Marine Group (“Walker”) with five locations in Florida. The acquisition enhances the Company’s presence on the southwest coast of Florida and expands new and pre-owned boat sales, as well as finance and insurance services, service and parts. The purchase price was $33.8 million with $29.7 million paid at closing and an estimated fair value of contingent consideration of $4.1 million. The estimated contingent consideration is part of an earnout subject to achievement of certain post-acquisition increases in adjusted EBITDA. The acquisition contingent consideration was determined using weighted average projections for the estimated post-acquisition adjusted EBITDA and was based on the Company’s historical experience with acquisitions as well as current forecasts for the industry. The minimum payout due on the acquisition contingent consideration is $0.2 million. The maximum amount of the earnout is unlimited.

The table below summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date, including the goodwill recorded as a result of the transaction:

Summary of Assets Acquired and Liabilities Assumed	($ in thousands)
Accounts receivable	$	129
Inventories		8,481
Prepaid expenses		39
Property and equipment		503
Identifiable intangible assets		8,520
Goodwill		26,927
Accounts payable		(213	)
Customer deposits		(3,033	)
Notes payable – floor plan		(7,563	)
Total purchase price	$	33,790

Roscioli Yachting Center Acquisition

On December 31, 2020, we acquired substantially all of the assets of Roscioli Yachting Center (“Roscioli”) with one location in southeast Florida. The acquisition expands the Company’s presence in the yacht category and amplifies the Company’s service and repair offerings. As part of the acquisition, we acquired the related real estate and in-water slips. The purchase price was $45.5 million, paid at closing.

The table below summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date, including the goodwill recorded as a result of the transaction:

Summary of Assets Acquired and Liabilities Assumed	($ in thousands)
Inventories	$	87
Prepaid expenses		1
Property and equipment		41,300
Identifiable intangible assets		1,530
Goodwill		2,993
Accounts payable		(180	)
Accrued expenses		(185	)
Total purchase price	$	45,546

Other Acquisitions

In fiscal year 2021, we also completed the following transactions:

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On December 1, 2020, Tom George Yacht Group with two locations in Florida

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On August 1, 2021, Stone Harbor Marina with one location in New Jersey

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On September 1, 2021, PartsVu, an online marketplace for OEM marine parts, electronics and accessories

Total purchase price of the acquisitions of Tom George Yacht Group, Stone Harbor Marina and PartsVu was $42.8 million and was paid with $32.2 million in cash, $2.1 million in seller notes payable, $5.1 million in estimated fair value of contingent consideration, $1.9 million in accrued purchase consideration and the remaining $1.5 million with the issuance of shares of Class A common stock. The estimated contingent consideration is part of earnouts subject to achievement of certain post-acquisition increases in adjusted EBITDA. The acquisition contingent consideration was determined using weighted average projections for the estimated post-acquisition adjusted EBITDA and was based on the Company’s historical experience with acquisitions as well as current forecasts for the industry. There is no minimum payout due on the acquisition contingent consideration and the maximum amount of the earnout is unlimited.

The acquisitions of PartsVu and Stone Harbor Marina are preliminary. The valuation of identifiable intangible assets is preliminary pending receipt of final valuation analyses. The valuation of tangible assets and assumed liabilities is preliminary as the acquisitions are subject to certain customary closing and post-closing adjustments.

The table below summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date, including the goodwill recorded as a result of the transactions:

Summary of Assets Acquired and Liabilities Assumed	($ in thousands)
Accounts receivable	$	390
Inventories		10,476
Prepaid expenses		180
Property and equipment		700
Identifiable intangible assets		13,940
Goodwill		25,512
Accrued expenses		(47	)
Customer deposits		(2,248	)
Notes payable – floor plan		(6,134	)
Total purchase price	$	42,769

Included in our results for the year ended September 30, 2021, the acquisitions contributed $107.9 million to our consolidated revenue and $13.3 million to our income before income tax expense. Costs related to acquisitions are included in transaction costs and primarily relate to legal, accounting, and valuation fees, which are charged directly to operations in the accompanying consolidated statements of operations as incurred in the amount of $0.8 million for the year ended September 30, 2021.

Fiscal Year 2019

In fiscal year 2019, we completed the following transactions:

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On December 1, 2018, the Slalom Shop with two locations in Texas

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On February 1, 2019, Ocean Blue Yacht Sales with three locations in Florida

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On February 1, 2019, Ray Clepper Boat Center with one location in South Carolina

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On May 1, 2019, Caribee Boat Sales and Marina with one location in Florida

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On August 1, 2019, Central Marine with three locations in Florida

Total purchase price of the fiscal 2019 acquisitions was $48.6 million and was paid with $19.4 million in cash and the remaining $29.2 million was financed with long-term debt and seller notes payable. Included in our results for the year ended September 30, 2019, the acquisitions contributed $62.0 million to our consolidated revenue and $4.0 million to our net income. Costs related to acquisitions are included in transaction costs and primarily relate to legal, accounting, and valuation fees, which are charged directly to operations in the accompanying consolidated statements of operations as incurred in the amount of $1.3 million for the year ended September 30, 2019.

The following unaudited pro forma results of operations for the years ended September 30, 2021, 2020 and 2019 assumes that all acquisitions were completed on October 1, 2018.

($ in thousands)	2021		2020		2019
Pro forma revenues	$	1,316,134	$	1,190,428	$	907,808
Pro forma net income	$	124,028	$	59,985	$	44,740