Private equity firm Compass Diversified Holdings, which includes mountain bike suspension maker Fox Racing Shox in its portfolio, has acquired a controlling interest in privately-owned CamelBak Products LLC. The deal is valued at US$257.5 million and Compass will initially own 89.9% of CamelBak’s common equity.
Shares of Compass closed at US$12.73 on Wednesday on the New York Stock Exchange (NYSE).
Based in Petaluma, California and founded in 1989, CamelBak pioneered the hands-free hydration category and is a global leader in personal hydration gear. The company offers a complete line of technical hydration packs, reusable BPA-free water bottles, performance hydration accessories, specialized military gloves and performance accessories for outdoor, recreation and military use.
CamelBak’s reputation as an innovator of best-in-class personal hydration products has enabled the company to establish preferred partnerships with leading national retailers, sporting goods stores, independent and chain specialty retailers and the US military. Through its global distribution network, CamelBak products are available in more than 50 countries worldwide. For the year ended 31 December 2010, CamelBak reported revenue of approximately US$122.2 million.
The purchase price of US$257.5 million for the membership interests of CamelBak is based on a total enterprise value of US$245.0 million and included US$12.5 million of cash and working capital adjustments.
The acquisition was consummated through a majority-owned subsidiary, CamelBak Acquisition Corp. This structure will allow Compass to amortize a substantial portion of the purchase price for tax purposes.
Acquisition related costs were reported at approximately US$4.2 million.
In addition to its equity investment in CamelBak Acquisition Corp, Compass provided loans totalling US$145.2 million to CamelBak as part of the transaction. CamelBak’s management team and a lender in Compass’ Revolving Credit Facility also invested in the transaction alongside the private equity firm.
Commenting on the acquisition, Alan Offenberg, CEO of Compass Diversified Holdings (CODI), said, “We are pleased to further expand our family of niche market leaders with the acquisition of CamelBak. This company possesses the critical characteristics that we seek in all of our subsidiaries, including market leadership, strong operating history and cash flow levels, proven management and compelling growth opportunities.
“CamelBak is an industry pioneer with strong brand recognition as the premier innovator of personal hydration products, offering superior performance as well as important health and environmental benefits. We expect to capitalize on the company’s strong market position, as well as favourable macro trends, including the growing demand for improved everyday hydration.
“We believe CamelBak will continue to evolve its leading product and innovation platform and strengthen its relationships with top retailers and the military, thereby increasing consumer penetration levels globally. We look forward to working with CamelBak to continue to accelerate their growth.”
Sally McCoy, Chief Executive Officer of CamelBak, will continue to serve in the same capacity at the company. She added, “CamelBak’s mission is to continuously reinvent and forever change the way people hydrate and perform. CODI’s acquisition of CamelBak provides an exciting opportunity to further that mission. We are eager to leverage the unique strengths of CODI’s financing structure and history of working with established middle market companies to build upon our track record of success in providing advanced hydration solutions for customers on a worldwide basis.”
