Captain Marvin's for only $4,270,000

[Alibaster McGillicutty]

I was looking for land/condos in Cayman and came across this. Not that I could afford it but I know we have used them twice.

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Watersports Business For Sale

Asking Price: $4,270,000 USD (Negotiable)

 

Captain Marvin’s is a well respected family owned watersports business.

 

Proven record of superb customer service and profitability for over 50 years.

 

Well known as one of the original operators of snorkel trips to the world famous Stingray City sandbar.

 

Business includes five recently refurbished tour and fishing boats, four buses and retail stock.

 

Ideal retail locations, including a convenience store, are leased in George Town and across from the Westin Hotel.

 

Sophisticated reservation tracking system. Incredible potential.

 

14% return on income projected for 2008.

 

Owner willing to assist with transition.

 

Fantastic opportunity for someone with entrepreneurial flair.

[caymanjohn]

Based on the current economic climate you could find 100s of better ways to invest that sort of money.

 

Ask yourself one simple question - if the business is a, "Fantastic opportunity for someone with entrepreneurial flair," why hasn't someone snapped it up already? There are plenty of people in the Caymans who could raise that sort of money with little difficulty.

 

Based on local rumours the business was originally put up for sale at least six months ago.

 

Capt Marvin's relies on cruise trade to survive. We have seen a drop in visitors coupled with increasing competition over the past year. Add to that the fact we are entering the low season and I would start to look very hard at the 14% 'projected' return for 2008.

 

I don't know what the onboard prices for Stingray City trips are but, according to the people I speak to out here, the operators are getting as little as US$12 per passenger from cruise line contracts.

[sixgun8]

Marvins doesn't do contracts with the cruiselines from what I know of. Not Carnival anyway. We paid 39.99 a piece to go on our excursion through Marvins, which was undercutting the cruiseline by $15 a person. We were extremely happy with the service. That's a steep price still. I am not sure what one of those boats go for, but they are pretty basic. Not high end in the least. The buses are your average bus that a hotel would use. Probably worth about 5 grand a piece. Boats are probably valued at about 8-9 grand in current condition. His shop is small and he doesn't appear to have a lot of retail stock, unless he has backstock in another location. I'd say about another 7-8 grand, retail. high estimates...5 boats-10 grand=50,000. busses 5 at 7 grand=35,000. retail stock of 10,000. looking at 95,000 in assets. But those are prices from My neck of the woods. So I'd add about 33% to what it would cost there, maybe 50% so again, high end. 140-145,000. Some of his boats might be better quality.

 

We had about 25 people on our excursion. $1000. for a 3 hour trip. figure the 5 hours were about $60 with similiar amount of people. $1500. so he's pulling in about 7-8 grand a day in revenue off the excursions alone. Expenses can't be all that high. 320 days of work if you are fully booked brings in 2.5 million. Looking to get your investment back in revenue in a little over 2 years. Actually not a bad investment.

[caymanjohn]

"Marvins doesn't do contracts with the cruiselines from what I know of."

 

Sorry, that's definitely not true, without cruise business he'd have been out of business a long while ago.

 

Out here all prices are outrageous, the buses would probably be valued at CI$8-10,000 each and the boats might go as high 8-10 times your estimate so there is an asset base if you could find a buyer.

 

But that's not the critical point.

 

Overheads are high (diesel is currently US$5.40 a gallon and rising), the boats are old and a full re-fit (even if you take the boat to Cuba or Honduras) ain't cheap. Any parts have to be bought in and crews (local or ex-pat) tend not to care too much about routine maintenance so you get a lot of down time. I'd also take the word 'refurbished' with a big pinch of salt, on island that means paint and some tidying up.

 

And as for "320 days of work if you are fully booked" that's dream which has forced more watersports companies into bankruptcy than I care to think about. I can name at least 10 other apparently solid businesses that have folded simply because the owners grossly over-estimated their potential turnover and profits.

 

Also bear in mind that we are now going onto low season, in June we go into Hurricane Season. Bank on plenty of periods up to 8-10 days long without enough work to cover your overheads until at least October.

 

The other problem to face is that, as a Caymanian company, Capt Marvins has enjoyed considerable political protection. An outsider coming in has a mountain of hurdles to overcome, not least of which is a legal requirement to have a Caymanian partner who must be a majority shareholder in the company regardless of how much capital they put in.

 

As I said before the company has been on the market at least six months, if it was such a good financial prospect it would have sold by now.

 

There's one thing people here have come to realise about the way the economy of our little island works - bigger is definitely not better. The smaller operations have proven far better at weathering the up and downs of what is becoming a very volatile market and that makes this sale even less attractive.

[sixgun8]

you have a better view of the financial settings of the Island than I do. I was kinda more spitballing mroe than anything.

 

I'd say the Biggest hurdle to selling the business is the majority ownership aspect. That's a toughy.

 

Other than that hurdle, I really think a person with the right dedication and organization could really make it work. I've been in management all my life and always have high hopes and thoughts. Working for others is not the way to make your money. But without the money to start with it's dang hard to start up your own business.

[sixgun8]

Here's a question for you. When Steve Irwin was killed, did the Stingray City industry take a hit? I kinda wondered about that. I had heard a lot of people get real skeptical about doing the stingray thing after that happened.

 

We did pick up a real estate guide when we were there on the cruise just for grins. Hard to imagine for twice what we paid for our house(we live frugally) we could get a 2 bedroom apartment there!!!

[jennajack]

Hi,

Can you tell me how much a taxi would cost for 4 people to get from the pier to Rum Point? I can't find that info any place.

Thanks, and have a great day!

[bookbabe]

Hi,

Can you tell me how much a taxi would cost for 4 people to get from the pier to Rum Point? I can't find that info any place.

Thanks, and have a great day!

 

Two people to Rum Point is about $76 US each way. Four might be a little higher. It's really impractical to take a taxi to Rum Point, since it's at the opposite side of the island, about 45 minutes from Georgetown, and you would have to prearrange a return trip since there wouldn't be any taxis there when you needed to go back to the ship.

 

Your better bet is to take a taxi to Seven Mile Beach or rent a car to drive yourself to Rum Point. There are also some tours that will take you to Rum Point after snorkelling and/or Stingray City.

[jennajack]

I think we have decided to rent a car. That does seem like the easiest thing to do. Thanks for the post :)

[twinkletoes4445]

Interesting find, Alibaster Mc. :) We also use CM's when we're in GC.

 

We've looked into buying a condo on Grand Cayman. They have very strict income requirements when it comes to how much you have to make to be able to live there. Before I'd buy a business, I'd make sure I'd fit within those guidelines.

 

I'd have to look around for the list of info that the real estate agent gave us, but there's a lot of variables when it comes to being able to live on the island (for any length of time). Hurricane insurance was very expensive, at least when it came to a condo.

 

The number of ships in port also varies a lot between high season and low. There are days in the summer, where there a no ships in port three days a week. These are the days that we usually book with CM's and on those days, we've never had more than 10 or so on our excursions. You have to also factor in the number of days where ships aren't allowed to tender to the island.

 

To me, it seems a high price for this business, at least for someone who isn't already on the island. Those that are there with permanent status, might not have the restrictions of those that are coming to the island to purchase a home or a business.

 

But it may very well be a good deal. However, until we started looking around, I had no clue about the guaranteed "outside" income they required if you wanted to live there. I'd have to look, but it seems like it was around 500k or so per year, but I don't have the exact number in front of me. But this may not apply for a business.

 

Also, when purchasing a home/condo, you pay the government 5% (I believe) of the cost of what you are purchasing. So that's on top of the purchase price of what you are buying. I'm not sure if this would apply to something like this or not, but at 4.3 million, I'd find out.

 

Maybe one of the locals can chime in on this. My mind is a bit fuzzy on the details from our search.

[twinkletoes4445]

I think we have decided to rent a car. That does seem like the easiest thing to do. Thanks for the post :)

 

Renting a car is the easiest way to see Rum Point. It's a lovely drive that direction, and we found the drivers on the island to be very polite. Plus, over on that side of the island we encountered very little traffic. I suppose early in the morning or toward the end of the day, you might encounter more rush-hour type traffic from people heading home, but the times we were going to and from that area we rarely saw more than a few cars.

[drew sailbum]

Also, when purchasing a home/condo, you pay the government 5% (I believe) of the cost of what you are purchasing. So that's on top of the purchase price of what you are buying. I'm not sure if this would apply to something like this or not, but at 4.3 million, I'd find out.

 

Maybe one of the locals can chime in on this. My mind is a bit fuzzy on the details from our search.

 

Government charges a stamp duty on most property transfers. Rates vary a bit, and there is a program to reduce duty for first time Caymanian home buyers. Duty would also apply to the transfer of real estate for a business. On the positive side, there is no annual property tax.

 

Businesses do have to pay business licensing fees annually. Work permit fees may be applicable for businesses employing expats. Import duty is paid on all that diesel fuel (included in the per gallon price) a business like this would need.

 

I do not personally know every boat that Captain Marvin's has or the condition of same. A 42ft Newton boat (a popular craft among local businesses) goes for about US$250,000 for just a bare hull and engines. Figure another US$50K-100K to completely outfit it, depending upon type of operation. Depreciate the boats a bit due to age and it is easy to see how 5 comparable boats could sell for more than US$1,000,000 in the local market.

 

As to value of buses... well vehicles imported are assesed a 27% or greater duty. A new motor scooter can go for more than US$4,000 so figure US$20,000 per used bus.

[twinkletoes4445]

Government charges a stamp duty on most property transfers. Rates vary a bit, and there is a program to reduce duty for first time Caymanian home buyers. Duty would also apply to the transfer of real estate for a business. On the positive side, there is no annual property tax.

 

Businesses do have to pay business licensing fees annually. Work permit fees may be applicable for businesses employing expats. Import duty is paid on all that diesel fuel (included in the per gallon price) a business like this would need.

 

I do not personally know every boat that Captain Marvin's has or the condition of same. A 42ft Newton boat (a popular craft among local businesses) goes for about US$250,000 for just a bare hull and engines. Figure another US$50K-100K to completely outfit it, depending upon type of operation. Depreciate the boats a bit due to age and it is easy to see how 5 comparable boats could sell for more than US$1,000,000 in the local market.

 

As to value of buses... well vehicles imported are assesed a 27% or greater duty. A new motor scooter can go for more than US$4,000 so figure US$20,000 per used bus.

 

Drew,

 

Thanks for the information. :)

 

There are a lot of positives when you purchase property on the Cayman Islands. Another thing that I vaguely remember is how the inheritance works, when it comes to the property. It transfers without the taxes that we have here (or something like that-again, I don't remember all the details). GC is by far our favorite island destination.