Florida family that ‘stumbled upon’ Mackinac Island hasn’t stopped buying pieces of it

A love affair with Northern Michigan that started two years ago with the acquisition of a family-owned Mackinac Island ferry service has steadily expanded into other sectors, and could inspire a Florida family to pursue more Michigan deals soon.

The Naples, Fla.-based Hoffmann Family of Companies started its journey here in 2022 with the acquisition of Shepler’s Ferry, which was the family’s first deal in Michigan. In May of this year, the Hoffmans acquired Mackinac Island-based Sip N’ Sail Cruises and its two boats. 

Most recently, the company earlier this month announced its acquisition of Mackinac Island Ferry Company and a move to consolidate ownership of all of the passenger ferries traveling between the island, Mackinaw City and St. Ignace. Following the three Michigan deals, the company’s marine division now has 46 vessels across seven states. 

Greg Hoffmann, the second-generation co-CEO with his brother, Geoff Hoffmann, told Crain’s Grand Rapids Business that the Shepler’s deal was purely “opportunistic-based,” a typical pattern for the multi-vertical family conglomerate.

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However, the Hoffmann family’s business pursuits led to a more cultural interest in Michigan.

“With Shepler’s Ferry, we found that opportunity and really fell in love with the business, and then subsequently fell in love with the area that they operate in,” Hoffmann said. “We really enjoy everything — the community, the natural beauty of Mackinac Island and its surrounding area — and we wanted to invest more. And that’s typically what we do when we buy something: We always look to scale.”

The scaling has already begun. In addition to about 20 vessels that the Hoffmanns added to its fleet across the three marine deals, the deals included more than 116 parcels of land in the Straits of Mackinac area, including docks in Mackinaw City, Mackinac Island and St. Ignace. They also acquired 51 buildings and 6,500 parking spaces as part of those deals. 

The Hoffmann family is now the largest real estate holder in the area and employs 500 people, according to the firm.

Meanwhile, the Hoffmann family’s interests in Michigan have expanded beyond marine transportation. Three separate deals have involved:

• Hoffmann Media Group’s acquisition of St. Ignace-based Maurer Publishing LLC, the publisher of the St. Ignace News and the Mackinac Island Town Crier, in March 2023.
• The acquisition of Gladstone-based Besse Forest Products Group, an Upper Peninsula wood products manufacturer, in March of this year. 
• The acquisition earlier this month of Lowell-based Envision Engineering, a full-service metal forming manufacturer, to add to its manufacturing portfolio. Grand Rapids-based M&A advisory firm Calder Capital represented Envision in the deal.

Scott Marshall, St. Ignace city manager, said local officials have had largely positive impressions of the Hoffmann family since their investment streak in the Straits, particularly for the company’s interest in keeping the former owners’ legacies intact.

“The Sheplers have been famous for investing in employees and using the ‘Disney method’ of training employees,” he said, referring to an employee orientation style that emphasizes family-owned business culture. “It sounds like the Hoffmann family has much the same sensibility and wants to continue that.”

Hoffmann said the family has its eye on a couple of additional hospitality-related investments in Northern Michigan, but no agreements have been formally inked. He said they’re also interested in venturing into marine freight opportunities, which would complement the ferry businesses.

“Our ears are always to the floor, looking for any and all opportunities,” he said. “When the planets align, and they jump off the page as a great business, it could be in anything, and we’re going to take a serious look at it.”

The Hoffmann origin story

Greg and Geoff Hoffmann’s father, David Hoffmann, made his early fortune in the 1980s after founding the Chicago-based executive search firm now known as DHR Global, which is still the conglomerate’s cornerstone business.

From there, David Hoffmann branched out into private equity through Osprey Capital LLC, now structured as a family office, and into real estate via Hoffmann Commercial Real Estate, which today manages properties cumulatively valued at more than $1 billion, according to the firm.

Under the second generation, the Hoffmann Family of Companies now owns about 200 businesses headquartered in 13 U.S. states, Canada and the UK. Together, the companies have 11,000 employees with operations across more than 250 locations in 30 countries, according to the Hoffmann Family of Companies’ website.

The family has thus far acquired businesses in eight sectors: agriculture, aviation and transportation, financial and professional services, hospitality and entertainment, manufacturing, marine, media and marketing, and real estate.

Northern Michigan isn’t the first time they’ve doubled down on a specific location. Three years ago, the family announced plans to invest $150 million in the historic wine region around Augusta, Mo., which is about 50 miles west of St. Louis. Their portfolio in that area currently includes six vineyards and wineries, a golf club, a pair of plant nurseries and a slew of other hospitality and entertainment businesses.

A ‘unique’ investing approach

Jeff Helminski, co-founder and managing partner of the Grand Rapids-based private equity firm Auxo Investment Partners, said the Hoffmanns’ investment approach in Northern Michigan appears “rather unique” compared to other wealthy families. 

“If it’s your home geography, we often see families investing in a lot of different things in the place they’re from and the place they know,” he said. “(When) they’re making an investment in something that’s not in their hometown, so to speak, it’s often about the business or about the industry that’s attractive to them, and they tend not to necessarily be local businesses.”

Helminski added that it’s also unusual that the Hoffmanns picked Michigan businesses — local ferry services and two small newspapers — that serve very specific geographies and are unlikely to scale.

“That’s a unique dynamic, not one that I’ve seen a lot of other families replicate,” he said. “I’d say it’s maybe a little more typical to see more of a theme across the things that (families) feel like they have expertise in.”

Helminski also said the Hoffmanns are unique in that only a “small minority” of family offices dabble in direct deals, or companies that they will own and operate.

Mike Brown, partner and managing director of Grand Rapids-based investment banking firm Charter Capital Partners, said many of the larger family offices have gotten into direct deals precisely because they don’t want to pay the steep fees that private equity firms might charge to manage their investments.

He said the advantage of this approach is that the family can then be choosy about which companies they invest in — and likely pay a lower price since they aren’t trying to drive fast returns.

“A private equity group really wants to grow a business fast — that’s how they return money for their investors,” he said. “A family office will often buy a business that is very profitable and just hold on to it … indefinitely. They don’t have to sell it.”

Brown said that could be advantageous for the ferry companies, because they are limited in their revenue growth by the number of tourists that come to the area, which isn’t likely to change drastically from year to year.

“I’m sure they’ll do things to improve operations and (trim expenses) and things like that,” Brown said. “But a lot of family offices like to buy culture — a business that has a good culture — and maintain that.”

Hoffmann echoed that, noting that they first were drawn to Shepler’s because the family was able to navigate the challenges that come with running a business together for nearly 80 years.

“Our company was started by our father, so we had a lot of synergies and things to talk about at the acquisition table,” he said. “… (The Sheplers) have shown that they not only are great people, but they run a really, really amazing operation that we were honored that they would even consider us to be involved with.”

He added: “The locals of that area are every bit as nice of a caliber as Chris (Shepler) and his family, so we were like, ‘Man, we stumbled upon just a beautiful place, not only to see, but to experience and work alongside with,’ and so that’s why you’re starting to see our appetite to continue to invest more in there.”

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