Monomoy Capital Partners acquires West Marine Inc

On July 4, 2017, it was reported that Monomoy Capital Partners was acquiring West Marine Inc. in a transaction unanimously approved by the retailer’s board of directors. The acquisition, which was expected to finalize during the third quarter of 2017, involved a 32 percent premium for the specialty retailer.

Based in Watsonville, California, West Marine specializes in boating gear, apparel, footwear, and other marine products. The company serves boat owners and professional service providers through its e-commerce platform and retail stores across the United States and Puerto Rico. Prior to the acquisition announcement, institutional investors and hedge funds held approximately 59.91 percent of the company’s stock.

In its quarterly earnings report released on April 26, 2017, West Marine posted revenue of $129.10 million, slightly below analyst estimates of $130.88 million, with a net margin of 1.19 percent and a return on equity of 2.70 percent. Prior to this, the company had announced a quarterly cash dividend on March 24, 2017, with an ex-dividend date scheduled for May 9, 2017. Following these developments, Zacks Investment Research downgraded West Marine stock from a “buy” rating to a “hold” rating on June 28, 2017. This followed an earlier upgrade by B. Riley from “neutral” to “buy” on October 4, with the company’s shares eventually trading 9.64 percent above their 52-week high and 65.38 percent above their 52-week low.