By Eric Smith
The final month of 2018 didn’t provide a high volume of M&A in the active lifestyle space, but a handful of notable deals helped the year close on a strong note as both financial and strategic buyers—and an acquiring group that combined the two—announced market-shifting moves.
For this month’s roundup, SGB is spotlighting Marquee Brands LLC’s acquisition of Hood River, OR-based outdoor brand Dakine. Though financial terms of the deal were not disclosed and Dakine CEO Ken Meidell was unable to comment, Nate Pund of Houlihan Lokey, which advised Dakine on the deal, told SGB why the move makes a lot of sense for the brand.
The buyer, Marquee Brands, is sponsored by Neuberger Berman Private Equity, a business of Neuberger Berman, whose global presence and financial backing will provide Dakine all the tools needed to add new categories and expand to new markets, Pund said.
“They’re going to be part of a large portfolio,” Pund said. “They’re going to have access to a lot of strategic resources in terms of capital, people and global reach. What you’re going to see is that Marquee, while will staying true to Dakine’s ethos, will be able to expand its products, expand its distribution and really make the business bigger and that much more successful.”
Pund compared Dakine’s growth potential to such brands as Canada Goose and The North Face, which soared once taken over by a private equity firm and a publicly traded company, respectively.
“They were small until finally someone figured out how to take the brand and energize it,” Pund said.
With the strategic management and financial backing of Marquee and Neuberger Berman, Pund added, Dakine could reach an extremely lofty number in annual revenue as the company, which already resonates with a loyal customer base, grows both its softgoods and hardgoods categories at home and around the world.
“Marquee sees a business that has grown very well, but if they bring in more resources, they can do that much faster,” he said. “Marquee sees this as a billion-dollar opportunity.”
Look for more on Dakine in future editions of SGB Executive as we track the brand’s progress under new ownership.
The other two big acquisitions from December were a consortium involving Anta Sports, Lululemon founder Chip Wilson and other investors purchasing Amer Sports, as well as Thule Group adding rooftop tent strength by acquiring Tepui Outdoors.. Here is the least you need to know about December’s top M&A deals:
The 411 – Marquee Brands LLC acquired the Dakine brand and all related intellectual property. Terms were not disclosed. In conjunction with the acquisition, Marquee Brands has entered into a long-term license agreement with JR286, which has acquired the operating assets of Dakine and will become Marquee Brands’ long-term operating partner for the brand.
Reaction – “Dakine is a high quality brand with a performance integrity and legacy of innovation that has allowed it to develop a fiercely passionate customer following, and which we believe is ripe with untapped growth potential. This brand is truly emblematic of the types of acquisitions we seek to make for the Marquee Brands portfolio.”
-Zachary Sigel, managing director, Neuberger Berman
What’s next? – Marquee Brands and JR286, who will develop Dakine’s core categories, will maintain dedicated teams for the brand in Hood River, OR; Los Angeles, CA; and Annecy, France. Ken Meidell, Dakine’s current CEO, will be joining the Marquee Brands team.
The 411 – A consortium led by China’s Anta Sports made an offer to acquire Finland’s Amer Sports in a deal that values the company at €4.6 billion (US$5.23 billion) and Amer’s board is recommending shareholders approve the offer. The consortium plans to operate Amer Sports independently from Anta, with a separate board of directors.
Reaction – “We are delighted about the opportunity to invest in Amer Sports, a leading sporting goods company with a strong portfolio of internationally-recognized brands. Sports is a common language that connects people across the globe and transcends different cultures and backgrounds. We share the same passion as Amer Sports’ management in providing excellent products, services and experiences that inspire sports lovers’ achievements and enjoyment, as well as setting the standard for innovation.”
-Ding Shizhong, Chairman and CEO, Anta Sports
What’s next? – There is still much to learn about the deal, but Heikki Takala, president and CEO of Amer Sports, said, “Under the ownership of the investor consortium, there is an opportunity to continue to deliver our strong sustainable profitable growth with further acceleration in our strategic priorities including soft goods, direct-to-consumer and China. This acceleration provides further exciting opportunities for our people globally. I am pleased that the existing management team has been invited to continue leading the business, and also that the investor consortium is committed to retaining our Helsinki corporate head office.”
The 411 – Thule Group acquired rooftop tent maker Tepui Outdoors Inc. for $9.5 million. This acquisition will further enhance the Thule Group’s expanding portfolio of products focused on an active lifestyle.
Reaction – “The overlanding category has been growing steadily over the last few years and we are very pleased to add this great assortment of high-quality Roof Top Tents and accessories to our broad portfolio of products that cater to consumers who enjoy living an active life. The synergies between the Thule brand’s market leading expertise for transport solutions on the car and Tepui Roof Top Tents exist in both consumer marketing and in the supply chain. When combined with the mutual philosophies on high quality, smart engineering and great design, as well as a shared passion for the outdoors, Tepui is a natural fit to our portfolio.”
-Magnus Welander, CEO and President, Thule Group
What’s next? – Tepui Outdoors has approximately 20 employees and net sales for 2018 is expected to be approximately $6.5 million. The acquisition is not expected to have a material impact on Thule Group’s total sales and profits and the rooftop tent category will be consolidated into the Sport&Cargo Carrier product category in reporting going forward.
**Other deals from last month. In case you missed it, here are other notable deals—announcements of either new acquisitions or ones that closed—that occurred in theactive lifestyle, sporting goods and outdoor industries in December (click the headline to read the full story on each):
Photo courtesy Dakine