In a deal that has been in the works for several months now, Apax Partners finalized its acquisition of Spyder Active Sports in a transaction valued at approximately $100 million, including assumption of debt. Apax is one of the largest private equity funds in the market, with over $12 billion in investment capital at its disposal.

Recently, the North American retail and consumer division of Apax has been focusing on the sports and recreation industries. Under the leadership of partner David Landau the company has closed several major deals, leading to the successful IPO’s of Sunglass Hut and Lifetime Fitness. Apax is also the investor behind the recent acquisition-fueled growth of the on-line bicycle retailer, Performance, Inc.
Landau told SEW’s sister pub The B.O.S.S. Report that Spyder caught his eye for several reasons.

“The company was growing very rapidly and systematically,” he said. “There was also a very strong management team in place that we felt comfortable backing… It’s our job to be familiar with the most interesting and exciting brands out there, especially if they are growing like Spyder is.”

With K2 snapping up two performance apparel companies, Marmot and Ex Officio, back-to-back, there has been a bit of a premium placed on companies in the soft-goods sector. Spyder had reportedly already turned down a deal valued at 1x its estimated 2004 sales of $88 million or roughly 7x to 7.5x estimated EBITDA in the $12 million to $13 million range.

Landau said, “It is very rare to find a company with this strong of a brand that is growing this rapidly. When we find this we would expect a premium to be attached to it, and we are comfortable paying this premium.”
Spyder’s founder and president, David Jacobs, and his senior management team hold a “significant” minority interest in Spyder. Jacobs is under contract to remain at the helm through 2010.

Jacobs told BOSS that Spyder has been growing at around 40% to 50% for the last few years. Sales in 2002 were “just over $40 million,” and jumped to around $61 million last year. Jacobs said that they currently have $85 million in bookings for 2004.

According to Jacobs, “Growth is coming from a consolidation of retail in large corporations’ hands, and a falling away of marginal brands that don’t make the cut with the large buyers… Spyder’s retail accounts are buying deeper into the collections.”

As far as future growth goes, Jacobs sees it coming from a combination of increased sales in their fall collection and an expansion into the summer market. He sees the business growing to more than $300 million within five years.