With the earnings season drawing to a close, M&A activity is heating up – this time in the water. Shares of boat retailer MarineMax (NYSE:HZO) are up by nearly 16% in the early trading session today on a potential deal with its smaller rival OneWater Marine (NASDAQ:ONEW).
M&A Action Heats Up in the Boating Market
According to Bloomberg, OneWater is in discussions to acquire MarineMax at $40 per share. That could be a significant premium over HZO’s last closing price of $28.48 per share. Reportedly, talks have been ongoing for months, and a final deal could create a combined entity with a $2.5 billion valuation (inclusive of debt).
While a final decision is yet to be chalked out, the announcement of a deal could come as soon as this month. Notably, the strategic M&A move could result in cost synergies and an earnings boost for the two companies.
In recent times, ONEW has taken the M&A route to bulk up in size. Last month, it acquired Garden State Yacht Sales, expanding its presence in the Mid-Atlantic boating market. A potential deal with HZO could lead to further consolidation in the boating market. OneWater’s move also comes amid not-so-positive times for boat retailers. Both ONEW and HZO witnessed a decline in net profits last year despite improving sales. Not surprisingly, the share prices of both companies have trended lower over the past year.
What Is the Stock Price Target for MarineMax?
Overall, the Street has a Strong Buy consensus rating on MarineMax, alongside an average HZO price target of $35.50.
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