The Yachting Edge Group

Houston, TX 77019, US
Consumer Products

The Yachting Edge Group plans to acquire and consolidate US privately-owned yacht dealerships. We have one acquisition under Letter of Intent and a follow-on acquisition in the pipeline. We also plan to add another brand for power & sailing yachts.

Reasons to Invest

Risk: Established business with no startup risk. This Company profits in a downturn.

Return: Mid-case internal rate of return on investment is 47.1%. Zero-growth IRR is 37.6%.

Income: Projected 8% dividend distribution with 356% dividend coverage.

Payback: Mid-case payback of capital is projected to be less than 3 years.

Growth: Economic forecast is for 35% growth. Our mid-case projection is for 5%.

Value: Investment is 65% of mid-case enterprise value.

Upside: Investment valued at 4 times earnings. Public peers valued at 15-17 times earnings.

Yacht dealerships are profitable businesses, many owned by entrepreneurs with limited capital. The Yachting Edge Group was formed by experienced industry professionals to acquire and consolidate US privately-owned yacht dealerships. We seek to acquire profitable dealers for power and sailing yachts that are leaders in their regional markets for 30 to 60 foot yachts. We plan to increase sales by adding brands and locations and to reduce costs by combining administrative functions. By acquiring individual dealerships for 4-5 times earnings we can form a consolidated dealer group valued at 15-17 times earnings.

The Yachting Edge Group has signed a Letter of Intent to acquire a leading dealer for a major yacht brand. This business has been consistently ranked number one or number two in its regional market for both power and sailing yachts. The purchase price is $1 million with $500K seller-financed. We plan to raise $600K from limited partners and to contribute $100K for working capital and organization expenses. Limited partners will own 80% of the business until all their investment is returned and then they will continue to own 50% of the business. Investors will also continue to receive a projected 8% dividend distribution.

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Summary

Prior Year Revenue Current Year Revenue Next Year Revenue
Company Age Employees Sub-Industry
8 years, 5 months 15 Recreational Goods, Other
Company Type Stock Exchange Stock Symbol
Privately-Held - -

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New Yachts

The Company has an exclusive-territory agreement with a leading manufacturer of yachts. New yacht sales for 2017 were $1.8 million. Gross margin on new yacht sales is 14-16%. Operating profit for 2017 was 8.0% of sales, well above the industry average of 4.8%. We also plan to add another brand for new power and sailing yachts.

New yacht sales (about 50% of recorded revenue) are projected to grow with the regional economy which includes the energy industry.

Yacht Brokerage

In addition to new yacht sales, the Company also acts as a broker for the sale of yachts owned by others. Brokerage commissions for 2017 were $1.5 million on gross brokerage sales of $16.1 million. Brokerage revenues are consistently 7-9% of gross brokerage sales. According to GAAP, however, only brokerage commissions are recorded as Company revenue.

Brokerage sales are complementary to new yacht sales. Sellers get cash they can use for new boat purchases and buyers have a less-expensive alternative to new yachts.

Management

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Director Chairman
Vincent L. Morvillo

Vincent L. MorvilloVince Morvillo has owned and operated yacht dealerships for more than forty years. His experience in the marine industry includes developing a commercial marina and managing a yacht dealership organization. Mr. Morvillo began his career in venture capital, where he managed several startups and turnarounds. He is a founding member of the Marine Edge Group, an organization that provides financial and management training for yacht dealerships. He is a Certified Professional Yacht Broker and Past President and current Board Member of the Yacht Brokers Association of America and the Texas Navy Association. He holds a BA from California State University and an MBA from the University of Houston.

Director Financial Officer
Lawrence J. Rogers

Lawrence J. RogersLarry Rogers has managed private business acquisitions worth more than $1.5 billion. He has owned and operated a yacht charter business with vessels on the US East & Gulf Coasts and British Virgin Islands. He is a two-time race committee chair and Principal Race Officer for Houston’s Lakewood Yacht Club and is a standing member of the Gulf Yachting Association safety committee. Rogers also holds five securities licenses and was President & Chairman of a national securities firm. He was the owner of a manufacturing company with sales in nine countries and the developer of six ship terminals. He holds a BS from the US Merchant Marine Academy and an MBA from the University of Houston.

Director Manager
Name Withheld for Confidentiality

(Name Withheld) has sold more than 1,000 power and sailing yachts. He has managed and owned yacht dealerships and brokerages representing more than twenty manufacturers. He is a consultant for GLG Research where he advises on the management of yacht dealerships. He is a Certified Professional Yacht Broker and Vice President and past Director of the Gulf Coast Yacht Brokers Association and a Regional Captain for the Yacht Brokers Association of America. He was recently selected for the Advisory Board of the largest yacht listing service in the world.

Funding

0%

Funding Goal$600,000

Funding Raised So Far

Funding Commitments

Funding Remaining$600,000

Funding TypeEquity

Pre-Money Valuation

Investor Ownership

Interest / Dividend

Previous Funding

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