Southfield, Michigan, Sept. 29, 2020 (GLOBE NEWSWIRE) — Sun Communities, Inc. (NYSE: SUI) (the “Company” or “Sun”), a real estate investment trust (“REIT”) that owns and operates or has an interest in manufactured housing and recreational vehicle communities, today announced that it has entered into a definitive merger agreement to acquire Safe Harbor Marinas, LLC (“Safe Harbor”). Safe Harbor’s full operating team, led by Baxter Underwood, will run Safe Harbor as a subsidiary of the Company independently from Sun’s manufactured home and recreational vehicle community business.
Safe Harbor is the largest and most diversified marina owner and operator in the United States. It owns and operates 101 marinas, manages five marinas on behalf of third parties and has an approximate 40,000-member network of boat owners across 22 states. Safe Harbor’s portfolio of high quality, prime coastal market marinas generates recurring rental income from annual and seasonal leases and further diversifies Sun’s geographic and demographic footprint. Safe Harbor has a proven ability to generate organic and external growth. The acquisition, which is expected to be accretive to 2021 Core FFO per share, will comprise approximately 15% of the Company’s pro forma total annual rental revenue.
Subject to closing adjustments, the aggregate purchase price for Safe Harbor is approximately $2.11 billion. At the closing, the Company will (i) assume debt in the estimated amount of approximately $808 million, (ii) issue the sellers REIT operating partnership common and preferred OP units in the estimated amount of approximately $130 million, and (iii) pay the balance of the purchase price in cash. The mix of consideration will depend on the amount of common and preferred OP units the sellers elect to receive and other factors. The actual amounts of each component of the merger consideration may be materially higher or lower than the foregoing estimates. The transaction is subject to customary closing conditions and is expected to close in the fourth quarter 2020.
“Safe Harbor’s scale and unique positioning, coupled with the fragmented marina industry, should provide us with incremental channels to drive shareholder value in the coming years,” said Gary A. Shiffman, Sun’s Chairman and CEO. “This transaction increases our geographic and customer diversity and introduces a new platform that can enhance our ability to generate industry leading returns.”
Baxter Underwood said, “The opportunity to join the Sun platform is an exciting development for Safe Harbor. We are proud of our work in making Safe Harbor the industry leader and were extremely careful in selecting the right partner to facilitate Safe Harbor’s continued growth. We are looking forward to partnering with Sun and are eager to contribute to the continued success of the combined enterprise.”
Citigroup acted as financial advisor to the Company and Jaffe, Raitt, Heuer & Weiss, Professional Corporation acted as legal advisor. Moelis & Company LLC acted as lead financial advisor and Citizens Capital Markets also acted as financial advisor to Safe Harbor and Sidley Austin LLP and Duane Morris LLP acted as legal advisors.
Safe Harbor Marinas was built in partnership with American Infrastructure Funds, Koch Real Estate Investments, Weatherford Capital, and Guggenheim Partners.