RECREATIONAL PRODUCTS Q1 2015

RECREATIONAL PRODUCTS
Q1 2015
CONTACTS
MERGER & ACQUISITION ACTIVITY
Jacob Voorhees
Managing Director
(617) 619-3323
[email protected]
The recreational products industry continued to experience a surge of mergers & acquisitions in
2014 with nearly 100 transactions reported for the year, as activity continued to accelerate during
the current economic expansion. This extraordinary number of transactions is being fueled by the
continued consolidation of many recreational product categories, as well as buyers looking to
benefit from the growth of the industry, which in-turn is being supported by a moderately
expanding economy, healthy consumer confidence and a continued march towards consumer
fitness and increased activity levels.
Sophea Chau
Director
(617) 619-3307
[email protected]
Daniel Schultz
Director of Business Development
(617) 619-3368
[email protected]
Recreational Products M&A Transactions
120
98
100
80
40
63
54
60
47
43
41
29
31
24
39
20
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Includes M&A transactions in the U.S. and Canada
Sources: Capital IQ and Capstone Partners LLC research
2015 OUTLOOK
BOSTON
CHICAGO
LONDON
LOS ANGELES
PHILADELPHIA
SAN DIEGO
SILICON VALLEY
TAMPA
The recreational products industry is a moderately expanding market that consistently attracts
investment dollars. The industry is expected to show continued strength in 2015, with growth for
the year anticipated in the 2%-3% range as economic expansion continues, underpinned by rising
employment and wages, which should in-turn boost consumer spending. Increased participation
rates, the on-going fight against obesity and a fitness surge by baby boomers are also expected to
contribute to long-term industry growth. While the United States is still the largest market for
recreational products, accounting for approximately 32% of global sales, the European market is
projected to continue its steady recovery and the Asian-Pacific markets are expected to show
above-average growth, all of which are contributing to the industry’s positive outlook for 2015.
Based on these positive market conditions, the industry’s M&A outlook for 2015 is optimistic,
supported by healthy business valuations and a very favorable borrowing environment for buyers.
Recreational Products
Q1 2015
The wide assortment of
NOTABLE M&A TRENDS & TRANSACTIONS
companies and product
A review of recent transactions in the recreational products industry reveals a
number of interesting M&A trends including the following:
categories included in the
industry’s list of recent
transactions indicates the
strength of the
recreational products
category overall, and its
broad-based
attractiveness as an
investment target.
Blockbuster Deals and Middle-Market Transactions: A wide range of acquisitions
are occurring in the industry, with buyers targeting everything from small, singleproduct companies or individual brands to large corporations with a full stable of
products and brand names. Examples of blockbuster transactions include the recent
sale of Varsity Brands to private equity group Charlesbank Capital Partners. Varsity
Brands includes three businesses, Herff Jones, Varsity Spirit and BSN SPORTS.
Financial details of the transaction were not disclosed, but Varsity Brands has sales of
more than $1.2 billion. Other examples of mega-deals include the pending
acquisitions of Reebok International by Jynwel Capital Limited at a transaction value
of $2.2 billion and that of Remington Outdoor Company, which is being acquired by
Global Digital Solutions for $1.8 billion. Despite these headline-grabbing deals, most
of the transactions in the industry are completed in the middle market and smaller
categories. Recent middle-market transactions include such well-known brand
names as retailer Sports Chalet and outdoor product manufacturer Igloo Products.
At the smaller end of the spectrum we are seeing a wide range of single-product
companies, such as Hip Appeal, a manufacturer of hip fitness wraps for active
women, which sold for $2 million and the singularly focused company Dead Down
Wind, a maker of scent control products that “stop a hunter from smelling like a
hunter.” Acquisitions of all sizes provide a way for buyers to gain market share and
sustain growth, while building their stable of brands. While large targets enjoy
advantages in economies of scale and strong brand recognition, smaller targets can
provide buyers with specialized or unique products. Innovative, high quality products
and a good reputation among end-users all contribute to competitive advantages
and can be found in targets of all sizes.
All Types of Recreational Activities: A wide variety of companies are included in the
list of recent industry transactions, including manufacturers, distributors and retailers
of apparel and equipment used in a diverse set of recreational activities. Ball sports,
adventure sports, fitness activities, winter sports and other categories are all
represented in the transactions. While several traditional sports product companies
are included, the long list of others contains companies serving smaller niche markets
such as scuba and free diving equipment, motocross equipment, fishing lures,
billiards and dart supplies.
Lifestyle brands have also been popular targets, as many categories – such as
skateboarding and yoga – enter the mainstream. Due to shifting consumer interests,
recreational activities are evolving. The recent acquisitions of World Industries
(skateboarding), PrAna Living (yoga), Camp Nine Surf (surfing), Yukon Charlie’s
(snowshoeing) and C4 Waterman (stand up paddleboards) are all examples of the
attractiveness of lifestyle products and brands.
The wide assortment of companies and product categories included in the industry’s
list of recent transactions indicates the strength of the recreational products
category overall, and its broad-based attractiveness as an investment target.
Capstone Partners LLC 2
Recreational Products
Q1 2015
Several major sporting
NOTABLE M&A TRENDS & TRANSACTIONS (Continued)
goods companies are
Continued Consolidation in Certain Segments: Although most segments of the
industry have been active, certain categories have witnessed a flurry of M&A activity
and consolidation. For instance, there have been a number of recent transactions in
the hunting & shooting market. Targets in the category range from well-known
companies like Remington Outdoor, Battenfeld Technologies (acquired by Smith &
Wesson) and Feradyne Outdoors (acquired by Shockey Enterprises/Snow Phipps
Group), to smaller firms such as Muddy Outdoors, a high end tree stand, safety
harness and scent control product supplier acquired by Mainstream Holdings and
Top Secret Deer Scents, which was acquired by Portland Outdoors and
manufactures a deer scent for the hunting market.
developing products with
built-in sensors that
analyze an athlete’s
performance and provide
feedback during activity.
Cycling is another category that has seen elevated activity, with deals reported across
the spectrum, from city bikes (Simcoe’s pending acquisition by Hawley-Lambert) and
mountain bikes (Ellsworth’s acquisition by BST Nano Carbon) to cycling apparel
(SQUADRA’s pending acquisition by K-2), bike helmets (C-Preme Limited, acquired by
BRG Sports, Inc.) and bike rentals (Tri-Cycle Bicycle Rentals’ acquisition by American
Bicycle Group).
Continued consolidation is also occurring among running retailers, led by Running
Specialty Group (RSG), a partnership between The Finish Line and Gart Capital
Partners. The Running Specialty Group made at least six acquisitions in 2014, as it
continues to buy leading independent running stores for access to attractive
geographic markets.
Technology Theme Continues: Technology continues to be a prevalent theme in the
industry, one that is expected to intensify in the coming years. Several major
sporting goods companies are developing products with built-in sensors that analyze
an athlete’s performance and provide feedback during activity. Tennis rackets, golf
clubs, fly-fishing rods, and other equipment are all being connected to wireless
devices that measure motion and record detailed biometric data that can be used to
pinpoint problems with a golf swing, fishing cast or tennis stroke. Furthermore,
activity and fitness trackers, smart watches and other wearable technology are
among the fastest growing categories in sporting goods, expected to surpass $1
billion in sales in the U.S. in 2014, a 26% increase over 2013. As further proof of the
importance of technology to recreational products brands, Adidas and New Balance
recently joined the Consumer Electronics Association.
Technology is also playing a growing role in retail sales, as consumers up their online
purchases. A recent survey by Mintel showed that two thirds (67%) of online holiday
shoppers planned to buy at least half of their gifts online.
Recent transactions that underscore the industry’s technology trend include
Yurbuds, which develops headphones designed specifically for athletes, acquired by
Harman International Industries, and Start It Labs’ acquisition of i1 Biometrics, a
developer of Impact Sensing Mouthguard, a solution to track and tally cumulative
forces of collisions and Impact Intelligence System, a system for detecting
undiagnosed sports brain injuries.
Capstone Partners LLC 3
Recreational Products
Q1 2015
Private equity buyers are
NOTABLE M&A TRENDS & TRANSACTIONS (Continued)
attracted to the sector’s
Private Equity Firms Attracted to the Industry: Private equity firms continue to be
acutely interested in the recreational products space and the industry remains a
sweet spot for these buyers. Private equity buyers are attracted to the sector’s longterm growth opportunities, as well as the chance to play an important role in
supporting a company’s expansion efforts during periods of rapid growth and scalebuilding. The following transactions exemplify some of the recent acquisitions of
recreational products companies by private equity firms.
long-term growth
opportunities, as well as
the chance to play an
important role in
supporting a company’s
expansion efforts during
periods of rapid growth
and scale-building.
Bruckmann, Rosser, Sherrill & Co. (BRS) acquired Quikfletch LLC and New
Archery Products Corporation (September 2014) – BRS, a New York-based
private equity firm, acquired New Archery Products (NAP) and Quikfletch
from NAP’s founder and other stockholders. The acquisition was made
through BRS Outdoor Sports Holdings LLC, which also owns Gamo Outdoors
(airguns and other outdoor accessories), Evolv Sports & Designs (rock
climbing footwear), Magpul (firearm accessories), and Royal Robbins
(outdoor and travel apparel). NAP and Quikfletch are manufacturers of
fixed and mechanical broadheads, vanes and fletching and other archery
related accessories. NAP’s products can be found at mass merchants,
sporting goods retailers and dealers throughout the country. BRS was
attracted to NAP’s proprietary manufacturing and patented designs,
reputable brand name, innovative products and loyal customer base. BRS
plans to provide strategic guidance to strengthen the Company’s focus on
product development and its position in the archery market.
Chartwell Investments Inc. acquires Easton Hockey, Inc. (August 2014) –
Chartwell Investments, a New York-based private investment firm, acquired
the Easton Hockey business from BRG Sports Inc. Founded in 1992,
Chartwell invests in and partners with family and entrepreneurially owned
companies across a range of industries. Chartwell plans to provide
“substantial financial backing” to the Company to improve product
innovation, strategic retail partnerships and consumer connections. Easton
Hockey is a leading designer, developer, manufacturer and marketer of
hockey sticks, skates, protective, accessories and apparel worldwide.
Chartwell also owns Richard Childress Racing (NASCAR teams).
Vestis Retail Group acquires Sports Chalet (August 2014) – Vestis Retail
Group, owned by Versa Capital Management acquired Sport Chalet, a fullservice specialty sporting goods retailer with 50 stores in the Western
United States. The combination of Sport Chalet with Vestis' East Coastbased retailers (Bob's and Eastern Mountain Sports) creates one of the
country’s largest outdoor-focused retail groups, with more than 150 stores
and $800 million in annual sales. Sport Chalet strengthens Vestis’ position in
the active lifestyle and outdoor categories, provides scale from which to
grow and diversifies its geographic footprint. The transaction was valued at
approximately $60 million. Versa also owns Hatteras Yachts and CABO
Yachts and Polartec (outdoor fabrics).
Capstone Partners LLC 4
Recreational Products
Q1 2015
SELECTED RECREATIONAL PRODUCTS M&A TRANSACTIONS
Enterprise
Value
(mm)
Date
Target
Acquiror
Target Business Description
Pending
Race Face and
Easton Cycling
Fox Factory
Holding Corp.
Manufactures high-performance mountain and road bike wheels
and other high-performance cycling components.
Pending
Reebok International
Jynwel Capital Limited
Manufacturers apparel, shoes and sports related products.
$2,200.0
Pending
Remington Outdoor
Company, Inc.
Global Digital
Solutions Inc.
Also known as Freedom Group, Inc., operates as a firearms,
ammunition and related products company.
$1,689.2
Pending
Simcoe Bicycles
Hawley-Lambert
Manufactures city bikes.
-
Pending
SQUADRA, INC.
K-2 Corporation
Manufactures cycling and triathlon gear.
-
12/22/14 Fox Head, Inc.
Altamont
Capital Partners
Operates as a global motocross equipment, apparel and
accessory brand.
-
12/15/14 Varsity Brands
Charlesbank
Capital Partners
The parent of BSN Sports and Herff Jones. Products include sports
apparel and equipment.
-
Smith & Wesson
Holding Corporation
A designer, importer and marketer of hunting and
shooting accessories.
11/26/14 Run Colorado
The Running Specialty
Group (RSG)/Gart
Operates a running store.
-
11/17/14 Broadhead Company
Wac'Em Archery
Products, LLC
Manufactures archery broadheads.
-
11/17/14 Dead Down Wind
Arcus Hunting/Bregal
Investments Inc.
Manufactures scent control products that stops a hunter from
smelling like a hunter.
-
11/11/14 Stoneridge Cycle Ltd.
Kent International, Inc.
Offers bicycles and bike accessories for children and adults.
-
12/1/14
Battenfeld
Technologies Inc.
$30.2
$130.5
11/11/14
Todd & Moore
Sporting Goods, Inc.
BSN Sports
Operates as a leading retailer and distributor of team apparel and
equipment in South Carolina.
-
11/4/14
Hip Appeal, Inc.
In Media Corporation
Manufactures hip wraps for fashion conscious, active and on the
go women.
$2.2
9/4/14
Ignite USA, LLC
Newell Rubbermaid
Manufactures hydration bottles under the Contigo and
Avex brands.
9/4/14
Muddy Outdoors
Mainstream Holdings
Supplies high end treestands and safety harnesses and a full line
of scent control products under the Xecute brand.
-
9/3/14
iHunt Calls
Altus Brands, LLC
Develops a mobile application for animal and hunting calls.
-
9/3/14
Quikfletch LLC and New
Archery Products
BRS Outdoor Sports
Holdings
Manufacture fixed and mechanical broad heads, vanes and
fletching and other archery related accessories.
-
9/3/14
Ellsworth
Handcrafted Bicycles
BST Nano Carbon
Manufactures mountain bikes.
-
8/27/14
Easton Hockey, Inc.
Chartwell
Investments Inc.
Manufactures and markets hockey sticks, skates, protective
accessories and apparel.
-
8/20/14
XO Athletic
EZ GARD/Shock Doctor
Manufactures athletic protection products.
-
8/18/14
Sport Chalet, Inc.
Versa Capital
Management/Vestis
Operates a chain of retail sporting goods stores.
8/17/14
Pro Peloton, LLC
Boulder Cycle Sport, LLC
Retails cycles including custom and semi custom bikes for racers,
casual riders and cycling enthusiasts.
-
8/10/14
World Industries
Skateboard Brands
INA International/
Golden Viking Sports
Develops and owns skateboarding brands including World and
Flameboy vs. Wet Willy.
-
$308.0
$59.5
Capstone Partners LLC 5
Recreational Products
Q1 2015
SELECTED RECREATIONAL PRODUCTS M&A TRANSACTIONS
Enterprise
Value
(mm)
Date
Target
Acquiror
Target Business Description
7/23/14
Gregory Mountain
Products
Samsonite International
Provider of technical backpacking, mountaineering and trail
backpacks, running products and accessories.
$85.0
6/17/14
Easton Cycling
Chris Tutton of Race
Face Components Inc.
Manufactures a full range of wheel sets and components for
bicycle manufacturers and riders globally.
-
6/23/14
Four Winns Boats, L.L.C.
Bénéteau S.A.
Manufactures fiberglass recreational wakeboard and boat
accessories and products.
-
6/17/14
Yurbuds LLC
Harman International
Industries, Incorporated
Develops in-the-ear and behind-the-ear headphones that are
ergonomically and functionally designed specifically for athletes.
-
6/17/14
Zippy Bags, Inc.
Individual investor
Manufactures and markets carrying bags to snowboard and
bicycle shops, as well as outdoor retailers.
-
6/13/14
FitDeck, Inc
Implus
Provides decks of playing cards - delivered in both physical and
digital formats - that make exercise simple, convenient and fun.
-
6/6/14
Cardboard Heroes
Lids Sports Group
Operates as a licensed sports apparel, headwear and novelty
retailer.
-
6/4/14
i1 Biometrics
Start It Labs
Develops protection and performance products and systems for
athletes.
-
5/30/14
PlayCore, Inc.
Sentinel Capital
Partners, L.L.C.
Manufactures playground and recreational equipment, aquatic
solutions, sports and fitness equipment, and surfacing solutions.
-
5/30/14
prAna Living, LLC
Columbia Sportswear
Company
Manufactures outdoor and yoga apparel.
5/29/14
Metro Run and Walk
Fleet Feet
Operates as a retail store for runners.
-
5/29/14
Slick Trick Broadheads
The Outdoor Group
Designs and manufactures fixed-blade broadheads used in
bow hunting.
-
5/29/14
Vortex Tennis, LLC
Zulu Energy Corp.
Markets Vortex brand tennis products in the US.
-
5/20/14
Synergy Sportz, dba
Yukon Charlie’s
Kwik Tek Inc.
Designs and develops winter sports and outdoor lifestyle
products, specializing in snowshoes and complementary products.
5/13/14
C-Preme Limited, LLC
BRG Sports Inc.
Doing business as Raskullz, manufactures and markets bike
helmets and accessories.
-
5/7/14
Olympia Sporting
Goods Inc.
BSN Sports
A leading distributor of sports team apparel and equipment in
the state of Alabama.
-
5/1/14
RTH Processing, Inc. and Accella Performance
RDT Manufacturing, LLC Materials Inc.
Manufactures colored EPDM granules used in playground
surfacing, running tracks and other athletic products.
-
5/1/14
Running Fit
The Running Specialty
Group (RSG)
Operates eight specialty running stores in Greater Detroit, Ann
Arbor and Traverse City Michigan.
-
4/29/14
Tri-Cycle Bicycle Rentals
American Bicycle Group
Rents bikes to participating athletes at multi-sporting events in
the Northeast.
-
4/25/14
Top Secret Deer Scents
Portland Outdoors
Manufactures a deer scent for the hunting market.
-
4/24/14
Feradyne Outdoors, LLC
Snow Phipps Group, LLC; Designs, manufactures and sells broad-heads, bow-hunting
Shockey Enterprises
accessories and bow-fishing equipment.
-
4/22/14
Confluence Outdoor
J.H. Whitney & Co., LLC
Manufactures kayaks, canoes and accessories.
-
4/22/14
East Texas Sports
Center, Inc.
BSN Sports
Operates as a leading distributor of sports team apparel and
equipment in Texas.
-
4/17/14
OrthoLite/
O2 Partners, LLC
Blue Point Capital
Partners
Manufactures and supplies insoles, specializing in products for
athletic shoes and outdoor boots.
-
$190.0
CF
Capstone Partners LLC 6
Recreational Products
Q1 2015
SELECTED RECREATIONAL PRODUCTS M&A TRANSACTIONS (CONTINUED)
Enterprise
Value
(mm)
Date
Target
Acquiror
Target Business Description
4/15/14
Easton Baseball/
Softball Business
Bauer Performance
Sports Ltd.
Manufactures baseball and softball equipment and accessories,
including bats, gloves, protective equipment and apparel.
$330.0
4/14/14
Brett Brothers Baseball
Team Express
Manufactures baseball bats and distributes baseball equipment
endorsed by the Brett family.
-
4/14/14
Liquivision Products, Inc. Huish Outdoors, LLC
Develops and manufactures diving equipment for SCUBA and
freedivers.
-
4/7/14
Golf Dimensions, Inc.
Golfsmith
International, Inc.
Retails golf equipment and accessories.
-
4/4/14
Riksha Golf Inc.
Dynamic Brands, Inc.
Manufactures golf carts and various accessories including baskets,
cup holders, rain hoods and utility cart boxes.
-
4/2/14
Hunter's Specialties, Inc. Peak Rock Capital
Manufactures hunting accessories such as wildlife calls and scents,
hunting apparel and other items.
-
4/1/14
Kolpin Outdoors, Inc.
Polaris Industries, Inc.
Manufactures outdoor sporting goods including hunting blinds,
firearm cases, game calls, decoys and feeders and other items.
-
3/31/14
Adventure 16, Inc.,
Wholesale Division
USA Summit
Distribution, LLC
Distributes backpacking, camping, climbing and adventure travel
accessories to outdoor dealers worldwide.
-
3/31/14
Igloo Products Corp.
Acon Investments, L.L.C.
Manufactures and markets coolers and outdoor products for the
recreational and sports markets.
-
3/17/14
EZ GARD Industries, Inc.
Bregal Investments Inc.
Doing business as Shock Doctor, Inc., manufactures and markets
sports protection equipment and apparel.
-
3/14/14
Mordecai
Sporting Goods, Inc.
Individual Investors
Operates as a retailer of sporting goods.
-
3/5/14
Altrec Inc.
TruSnow.com
Doing business as Altrec.com, offers outdoor clothing and gear
products online for men, women and kids.
3/3/14
Campea
Individual Investors
Manufactures and distributes soccer products for soccer
enthusiasts, players and retailers.
3/2/14
North Technology
Group/North Sails
Oakley Capital;
Windway Capital Corp.
Designs and builds sailing products including sails and sailing gear,
as well as outboard sportboats , rigging and marine components.
2/27/14
Wave Loch, Inc.,
FlowRider Product Line
Whitewater West
Industries Ltd.
Manufactures surf water rides.
-
2/6/14
VA Runner
The Running Specialty
Group (RSG)
Operates two running stores with locations in Fredericksburg and
Woodbridge, VA.
-
2/6/14
West 49 Inc.
YM Inc.
A specialty retailer of apparel, footwear, accessories and
equipment related to the youth action sports lifestyle in Canada.
$2.7
1/22/14
C4 Waterman, Inc.
Wenonah Canoe, Inc.
Manufactures stand up surfing paddles, sup boards and stand-up
surfing equipment.
-
1/22/14
BOGgear
Battenfeld
Technologies Inc
Manufactures monopods, bipods and tripods for the hunting and
shooting market.
-
1/20/14
Sombrio
Hi Fibre Textiles/Dorel
(Sugoi)
Specializes in apparel for mountain bike riding.
-
1/13/14
Tony Hawk and
Hawk Brands
Cherokee Inc.
Two signature apparel brands previously owned by
Quiksilver, Inc.
1/7/14
Blind Ambition
Bale Blinds
Redneck Outdoor
Products
Manufacturer of realistic looking hay bale blinds for hunting
enthusiasts.
-
1/1/14
Kwikee Kwiver
Company, Inc.
Altus Brands LLC
Manufactures quivers, bow accessories, arrow holders,
replacement parts and sidewinder hip mounts used in hunting.
-
$3.3
$131.0
$19.0
CF = confidential
Transaction highlighted in blue was completed by Capstone Partners
Sources: Capstone Partners LLC research, Capital IQ, company public filings and press releases
Capstone Partners LLC 7
Recreational Products
Q1 2015
PUBLIC COMPANY TRADING & OPERATING DATA
Price % 52 Wk
12/31/14
High
Company
Market
Cap
Enterprise
Value
Revenue
LTM
EBITDA
Margin
1-Yr Rev
EV / LTM
Growth Revenue EBITDA
Amer Sports Corp.
$19.44
95.7%
$2,276.4
$2,918.4
$2,752.3
$198.7
7.2%
4.0%
1.1x
Black Diamond, Inc.
$8.75
60.1%
$285.8
$268.6
$222.8
$10.0
4.5%
36.9%
1.2x
NM
$51.26
98.2%
$4,764.8
$4,625.6
$4,014.7
$452.3
11.3%
11.4%
1.2x
10.2x
Brunswick Corp.
Callaway Golf Co.
14.7x
$7.70
74.4%
$597.3
$673.1
$879.5
$53.7
6.1%
5.3%
0.8x
12.5x
Dorel Industries, Inc.
$34.56
95.3%
$1,121.0
$1,529.7
$2,610.1
$182.0
7.0%
7.7%
0.6x
8.4x
Escalade, Inc.
$15.09
87.7%
$210.5
$227.9
$166.2
$17.7
10.6%
22.5%
1.4x
12.9x
$1.88
81.6%
$128.8
$258.3
$467.0
$25.4
5.4%
8.6%
0.6x
10.2x
Jarden Corp.
$47.88
98.3%
$9,206.9
$13,596.8
$8,064.7
$930.1
11.5%
15.9%
1.7x
14.6x
Johnson Outdoors, Inc.
$31.20
98.3%
$311.1
$248.1
$425.4
$33.8
7.9%
(0.2)%
0.6x
7.3x
Lafuma SA
$23.18
96.1%
$164.6
$145.5
$252.7
$19.8
7.8%
(14.6)%
0.6x
7.3x
Performance Sports Group Ltd.
$18.25
98.4%
$847.2
$1,235.5
$489.3
$51.7
10.6%
20.7%
2.5x
23.9x
Mean
8.2%
10.7%
1.1x
12.2x
Median
7.8%
8.6%
1.1x
11.4x
Harmonic Mean
7.5%
NA
0.9x
10.8x
Head NV
EV = enterprise value; LTM = last twelve months
$ in millions, except per share data
NM = Not Meaningful; NA = Not Available
Last Twelve Month Margin Performance
50.0%
45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
43.7%
42.2%
40.3%
39.7%
39.6%
35.0%
7.2%
Amer Sports
Black
Corp
Diamond,
Inc.
6.1%
Brunswick
Corp.
34.5%
23.3%
11.3%
4.5%
31.2%
29.9%
26.6%
Callaway
Golf Co.
7.0%
11.5%
10.6%
5.4%
Dorel
Escalade, Inc Head NV
Industries,
Inc.
Gross Margin %
Jarden Corp.
7.9%
Johnson
Outdoors,
Inc.
7.8%
10.6%
Lafuma SA Performance
Sports
Group Ltd.
EBITDA Margin %
Last Twelve Month 1-Year Revenue Growth
36.9%
40.0%
30.0%
22.5%
20.7%
20.0%
15.9%
11.4%
10.0%
5.3%
4.0%
7.7%
8.6%
0.0%
-0.2%
-10.0%
-14.6%
-20.0%
Amer Sports
Black
Corp
Diamond,
Inc.
Brunswick
Corp.
Callaway
Golf Co.
Dorel
Escalade, Inc Head NV Jarden Corp. Johnson
Industries,
Outdoors,
Inc.
Inc.
Lafuma SA Performance
Sports
Group Ltd.
Source: Capital IQ as of December 31, 2014
Capstone Partners LLC 8
Recreational Products
Q1 2015
CAPSTONE PARTNERS: RECREATIONAL PRODUCTS TRANSACTIONS
Recently, Capstone Partners advised Synergy Sportz, dba Yukon Charlie’s,
in its sale to Kwik Tek Inc. The transaction resulted in complementary
products and market recognition, enhanced distribution channel access,
additional sourcing and supply chain expertise and innovative product
design and brand capabilities for both companies.
has been
acquired by
Yukon Charlie's management built a leading brand and a scalable business
that, now as part of a larger entity, has enhanced growth opportunities.
This transaction is representative of the robust M&A activity in the
recreational products space. Both corporate and private equity buyers are
active, with many employing a buy vs. build strategy in order to quickly
gain access to growing niches or well-known brands, new sales and
distribution channels and expanded geographic markets.
a portfolio company of
Capstone Partners has completed several transactions in the recreational products industry. These transactions
involved companies that manufacture and market a variety of products related to biking, boating, off-roading,
hunting and camping. Capstone’s experience in the recreational products sector provides us with insight into the
valuable attributes and valuation metrics of a target company, the active buyers in the industry and the nuances of
transactions in this space.
has been
acquired by
has been
acquired by
has divested
has been
acquired by
strategic
joint venture
has recapitalized with
has been
acquired by
has been
acquired by
a portfolio company of
has been
acquired by
financial advisory
THE AMERICAN
BICYCLE GROUP, LLC
Capstone Partners LLC 9
Recreational Products
Q1 2015
RECREATIONAL PRODUCTS TEAM
Jacob Voorhees, Managing Director
[email protected] • (617) 619-3323
Jacob is a founding member of Capstone Partners. He focuses on asset positioning, strategy
articulation, due diligence and negotiations coordination. Formerly, Jacob was with Andersen
Corporate Finance LLC, where he focused his efforts on the software and direct marketing
industries. He started his career in New York City with Rabobank International, a multi-national
Dutch investment bank headquartered in Utrecht, the Netherlands. While at Rabobank
International, Jacob worked in the mergers and acquisitions group focusing on cross-border
transactions in the consumer products, food and beverage industries.
The M&A Advisor named Jacob to its prestigious 40-UNDER-40 deal makers list in 2012. Jacob
received an MBA from the Sloan School of Management at Massachusetts Institute of
Technology (MIT) and a BS from Cornell University. Jacob is qualified as a General Securities
Representative.
Sophea Chau, Director
[email protected] • (617) 619-3307
Sophea specializes in mergers & acquisitions, private placements and financial advisory
services. Her responsibilities include providing financial and valuation analysis, performing due
diligence and drafting all marketing materials.
Prior to joining Capstone, Sophea was an analyst at FTN Midwest Securities, a full-service
investment banking firm based in Cleveland. While working in their New York office, she
focused on M&A advisory for middle-market companies in a variety of industries, including
healthcare, pharmaceutical services and marketing & advertising. Sophea is Vice President of
the Columbia Alumni Association of Boston and holds a Bachelor of Arts in Economics from
Columbia University.
Daniel Schultz, Director of Business Development
[email protected] • (617) 619-3368
Dan oversees Capstone’s national business development and industry coverage activities,
working closely with current and prospective clients of the firm on matters related to corporate
sales, recapitalizations, mergers & acquisitions and growth financings. In his role, Dan is able
to deliver specific market intelligence to clients regarding M&A, financing, strategic, industry
and competitive trends.
Prior to spearheading the firm’s business development and market initiatives, he was a Vice
President in Capstone’s M&A group, managing numerous successful transactions across a
variety of industries. Dan also gained hands-on transaction experience as an investment banker
at Headwaters MB. He started his career with Ernst & Young’s National Professional AABS
practice and later worked in Assurance and Advisory Business Services in the Denver office.
Dan received a BE in Biomedical Engineering with a Business Minor from Vanderbilt University.
He earned an MBA and a Master of Accountancy from the Daniels College of Business at the
University of Denver.
Capstone Partners LLC 10
CAPSTONE’S OFFICE LOCATIONS
BOSTON
176 Federal Street
3rd Floor
Boston, MA 02110
(617) 619-3300
CHICAGO
200 South Wacker Drive
Suite 3100
Chicago, IL 60606
(312) 674-4531
LONDON
42 Brook Street
London W1K 5DB
United Kingdom
+44 (0) 203 427 5068
LOS ANGELES
23046 Avenida de la Carlota
Suite 600
Laguna Hills, CA 92653
(949) 460-6431
PHILADELPHIA
1515 Market Street
12th Floor
Philadelphia, PA 19102
(215) 854-4063
SAN DIEGO
12707 High Bluff Drive
Suite 200
San Diego, CA 92130
(858) 926-5950
SILICON VALLEY
228 Hamilton Avenue
3rd Floor
Palo Alto, CA 94301
(650) 319-7370
TAMPA
1550 W Cleveland Street
Suite 700
Tampa, FL 33679
(813) 251-7285
ABOUT CAPSTONE PARTNERS
Capstone Partners LLC is a premier investment banking firm dedicated to serving
the corporate finance needs of middle market business owners, investors and
creditors. The firm provides corporate sale & divestiture, merger & acquisition,
private placement, corporate restructuring, valuation and financial advisory
services. Capstone maintains various industry specialties including one in the
Recreational Products industry. The firm also has a merchant banking capability to
actively co-invest in transactions. Headquartered in Boston, Capstone has offices
in Chicago, London, Los Angeles, Philadelphia, San Diego, Silicon Valley and Tampa.
For more information
about our expertise,
please visit
www.capstonellc.com
World Class Wall Street Expertise. Built for the Middle Market.
© 2015 Capstone Partners LLC. All rights reserved.