In a deal that may make evoke whines from some outdoor 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, it will not be burdened by the debt that often accompanies management-led buyouts.
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, the Gregory parent company which was sold to British defense conglomerate BAE Systems Inc. for $4.5 billion last year. Their stakes in AH were valued at $76.0 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 said his investment in Gregory is a separate venture.
Terms were not disclosed, although Simons told The B.O.S.S. Report Thursday that no debt was used to fund the purchase. The group plans to grow Gregory organically, said Simons.
The transaction makes Gregory a stand alone company for the first time since 1983, when it was acquired from founder Wayne Gregory by Bianchi, a company that makes gun holsters and other equipment for law enforcement and the military. Bianchi 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,” Simons said.
Simons declined to say what Gregorys sales were, but said the company is growing and profitable.
Gregory grew “dramatically” in the United States last year, propelled in part by favorable reviews of its Z55 lightweight weekend pack, said 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,” BoisDEnghien said.
The company sees its greatest potential in continuing to drive its suspension technology and other innovations into a broader range of products, particularly in the lifestyle and travel categories, which are growing.
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, said BoisDEnghien.
Simons described 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. On Thursday, company founder and product guru Wayne Gregory, was among those driving north.
“The fun and neat part of growing Gregory is there is a global footprint already,” said 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.”