K2, Volkl, Line Secure A New Path Forward
Months of uncertainty end as storied brands get sold to private equity firm
When news surfaced recently that K2 and several of skiing’s most popular brands would be sold from a publicly traded corporation to a private equity firm this month, it ended months of speculation and uncertainty about the future of some of the sports’ most storied companies. But it also created a shift in the wintersports market. According to fresh numbers from Snowsport Industries America (SIA), 10 percent of all wintersports sales now go to private equity firms, versus 60 percent held by private companies and 30 percent by publicly traded corporations.
At the end of May, Kohlberg and Company, a private equity firm specializing in “middle market investing,” entered an agreement to pay Newell Brands $240 million for K2, Volkl, Marker, Dalbello, Madshus, Line, Ride, Full Tilt, BCA, Atlas, and Tubbs. As such, it becomes the largest private equity holder in the snowsports market, according to SIA. Not part of the deal was Marmot, which earned $100 million in retail last season and continues to be part of Newell Brands.
Last fall, Newell threatened to shut down K2 and the other brands, saying the companies held no value for investors and were thus “distractions.” The news sent shockwaves through the ski industry, and Newell spent the next several months searching for a buyer.
“We’re super excited,” said Alex Draper, vice president of global marketing for K2 Sports, this week. “One of the cool things here is it’s the first time in a long time that we’ve had ownership that has been a 100 percent excited about the opportunity of the winter sports business.”
A year ago, Newell Brands, which also owns Rubbermaid, Sharpie, and Paper Mate, acquired Jarden Corp., a corporation that purchased K2 and Volkl and other brands back in 2007. Shortly after the acquisition, Newell executives announced a plan to restructure the company’s portfolio, cutting the fat and divesting in the name of “cost synergy,” “value creation,” and other business goals.
Under the Kohlberg and Company umbrella, Draper noted the benefits of working for a private equity firm. “It allows us to focus on a longterm vision,” he said.
Illustrating the new owner’s sudden influence on the ski world, SIA’s Director of Research Kelly Davis reports that Kohlberg and Company’s new acquisitions represent nearly six percent of total snowsports market retail sales. In a recent report, she provided the following figures to demonstrate just how significant this acquisition is to the market, particularly in the alpine equipment and snowshoe categories.
According to Davis, Kohlberg and Company now has 17 percent of alpine boots market share with Dalbello, Full Tilt, and K2 alpine boots; 36 percent of the alpine ski market share with K2, Volkl and Line skis; and 12 percent of the snowboard market share with K2 snowboards and Ride.
Reposted from Powder Magazine with permission from TEN (The Enthusiast Network)