Blackstone Infrastructure Buys Safe Harbor Marinas in US

In a major deal, Sun Communities, Inc., a real estate investment trust (REIT) has announced on Monday to sell its entire Safe Harbor Marinas business, the largest marina and superyacht servicing business in the US, to affiliates of Blackstone Infrastructure for an all-cash purchase price of $5.65 billion, subject to certain post-closing adjustments.

The transaction accelerates Sun’s strategic goal of re-focusing on its core MH and RV segments and significantly enhances its leverage profile and financial flexibility. The base purchase price represents an approximate 21x multiple on the estimated 2024 Funds from Operations of the Safe Harbor business.

The deal is expected to produce approximately $5.5 billion of pre-tax proceeds after transaction costs, which will strengthen the company’s balance sheet. Proceeds are anticipated to be used to support a combination of debt reduction, distributions to shareholders and reinvestment in the company’s core businesses.

Transaction Benefits

Post-transaction, Sun’s North America Manufactured Homes (MH) and Recreational Vehicle (RV) portfolio is expected to account for approximately 90% of the company’s net operating Income, streamlining its strategic focus as a pure-play MH and RV owner and operator.

Once completed, the transaction is expected to meaningfully de-leverage Sun’s balance sheet. Initially following the transaction, the company expects its net debt to trailing 12 months EBITDA, on a pro forma basis, to be reduced from approximately 6.0x to between 2.5x and 3.0x at closing.

It is also expected to reduce the Company’s exposure to service, retail, dining and entertainment and other non-annual income streams while positively impacting the company’s financial metrics including its margin profile, overhead efficiency, capital expenditure requirements and revenue-to-cash flow conversion.

Refocus on Core Segments

Sun’s Chairman and CEO Gary Shiffman said that the transaction will further accelerate their strategy to improve the company’s leverage profile and refocus on our core segments.

He also said they were incredibly pleased with the performance of Safe Harbor and with the outcome of this highly successful sale process. We anticipate that Blackstone will further Safe Harbor’s position as the leading marina and superyacht servicing business in the US, he added.

Jeff Blau, Chair of Sun’s Capital Allocation Committee, said that the deal allows Sun to focus on its core businesses which operate at high margins and produce durable income streams, and they were confident to deliver strong, consistent long-term growth.

Safe Harbor has been an outstanding performer for Sun, and this sale allows us to realise substantial value from our investment, while positioning the Company for future growth and enhanced return opportunities for our stakeholders, he added.

The initial closing of the transaction is expected in the second quarter of 2025. Certain properties representing approximately 10% of the total consideration may be transferred and paid for in one or more subsequent closings, subject to receipt of certain third-party approvals.