In a deal that may make evoke whines from some industry insiders, three Fortune 500 veterans bought Gregory Outdoor Products. The all-cash deal marks the first time the company has been independent since its founder, Wayne Gregory, sold the business 25 years ago. Because the trio paid cash for Gregory, the company will not be burdened by the debt that often accompanies management-led buyouts.
Gregory president John Simons, a backpacking enthusiast who ran $10 billion Swift and Company before joining Gregory in January 2007, is leading the group. The other two investors are Warren Kanders and Robert Schiller. Kanders is the former CEO, and Schiller the former president and COO, of Armor Holdings, Gregorys parent company that was sold to British defense conglomerate BAE Systems Inc. for $4.5 billion last year. Their stakes in Armor Holdings were valued at $76 million and $28.6 million, respectively, at the time of the sale. They also stood to earn tens of millions of dollars in severance pay. Kanders now runs an investment management company, but Simons says his investment in Gregory is a separate venture.
Terms of the deal were not disclosed, although Simons says that no debt was used to fund the purchase. He adds that the group plans to grow Gregory organically.
The transaction makes Gregory a stand-alone company for the first time since 1983, when it was acquired by Bianchi from founder Wayne Gregory. Bianchi, which makes gun holsters and other equipment for law enforcement and the military, was acquired by Armor Holdings in 2005.
“What we are all just thrilled about is having Gregory disentangled and out on its own with proper resources so we can continue to worry about brand innovation and delighting customers,” says Simons. Although he declines to divulge Gregorys sales figures, he reports that the company is growing and profitable.
Gregory grew “dramatically” in the U.S. last year, propelled in part by favorable reviews of its Z55 lightweight weekend pack, says Jim BoisDEnghien, director of North American sales and marketing. “While the market is seeing declines in big pack categories, we continue to see strong market share and entered the mid-pack category, which has seen a lot of growth.”
According to company execs, Gregory will grow by continuing to drive its suspension technology and other innovations into a broader range of products-particularly in the expanding lifestyle and travel categories. In this endeavor, Gregory will draw on its success in Japan, where it sells casual bags and daypacks that have not been introduced to North America, notes BoisDEnghien. Simons describes this as extending Gregorys reputation for fit and comfort into other “carrying experiences.”
The new ownership comes as Gregory moves into its new headquarters in Sacramento, about 500 miles north of Bianchis base in Temecula, CA.
“The fun and neat part of growing Gregory is there is a global footprint already,” says Simons. “Our task is figuring out how to best allocate resources between North America and international. Being separate, with a good balance sheet and people who like building stuff, is fun to think about.”
