Shorts Get Burned: SUI’s $5.65B Deal Proves the Bears Wrong
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- Sun Communities (SUI) announced the sale of Safe Harbor Marinas to Blackstone for $5.65 billion, significantly deleveraging their balance sheet and improving margins.
- The sale values the marina segment at 21x FFO, higher than SUI's valuation last night, proving the asset's worth and countering short-seller claims.
- Post-sale, SUI's net debt to EBITDA ratio would improve from about 6x to around 3x, if they simply sit on the cash or pay down debts.
- Despite a potential revenue drop, the strategic move positions SUI for stronger financial health and better market performance, outpacing peers and indexes.
- The Q4 2024 earnings report is Wednesday, 2/26/2025, after the market closes. I appreciate that management gave analysts time to digest the huge transaction before the earnings report.
I prepared a full report on Sun Communities selling Safe Harbor to Blackstone.
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Disclosure: I am long SUI.
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