As first reported in The B.O.S.S. Report on Monday, Bear Stearns Merchant Banking confirmed Thursday that they have purchased CamelBak Products, Inc. from Kransco Group owner John Bowes in an all-cash deal valued at $210 million. Bear is expected to make a $100 million equity investment in the deal, with the balance expected to be funded through a senior debt package with BNP Paribas SA and Bank of New York Co.

As we reported in B.O.S.S. on Monday, the strategic buyers fell out early in the bidding process as the price tag got a little too rich, according to people close to the deal, and was narrowed down to around three or four institutional players over the last few months.

In a conversation with Bear Stearns senior managing director Rick Perkal, The B.O.S.S. Report has learned that CamelBak management is going to stay in place and will gain some ownership equity in the company. “We think we have tremendous growth opportunities ahead for this company, which has one of the finest management teams around,” he said.

Operations will remain in Petaluma, CA.


CamelBak has been owned since 1995 by The Kransco Group, a San Francisco-based holding company controlled by John Bowes. According to a story in the San Francisco Chronicle, Kransco only ponied up about $4 million for CamelBak, which was named FasTrak Systems and based in Weatherford, TX. Bowes moved the company to Petaluma to be closer to Kransco and higher caliber management talent.

Kransco sold Yakima Products to Watermark Paddlesports in August 2001 in a deal valued at roughly $91 million. J.P. Morgan also brokered that deal. Bowes bought Yakima, which was earning nearly $2 million on $20 million annual sales, for about $1 million in cash plus assumption of $15 million of debt. Bowes said they had more than doubled sales to $52 million and increased profits five-fold to around 19% of sales, according to the Chronicle piece.

The Camelbak deal, which was brokered by J.P. Morgan Chase & Co., is rumored to be worth approximately 6.5x CamelBak's annualized EBITDA. If the percentages are anywhere near the Yakima deal, it would put CamelBak’s sales near the $170 million mark, roughly double many recent estimates.

The CamelBak acquisition is expected to close by the end of the month.