The Riverside Company has sold Kyjen (DBA Outward Hound), a pet products company that it acquired in August 2013, to J.W. Childs Associates.
Outward Hound is a designer and distributor of pet toys and other pet accessories such as travel gear, games and life jackets. The company’s products are sold under the Outward Hound, Petstages, Dublin Dog, Bionic and Nina Ottosson brands. Outward Hound is headquartered near Denver in Centennial, CO (www.outwardhound.com).
During Riverside four-year hold the firm expanded Outward Hound’s products, customers and markets through the add-on acquisitions of Bionic Pet Products (Ladera Ranch, CA) in January 2015; Zoo Active Products AB (Karlskoga, Sweden) in September 2015; Petstages (Northbrook, IL) in October 2015; and Dublin Dog (Madison, NC) in November 2016. In addition to diversifying Outward Hound into new dog products, the add-ons introduced the cat market to the company. These efforts helped the company expand relationships with existing customers while entering new channels, such as big-box retailers.
“Our add-on strategy quickly accelerated growth,” said Riverside Managing Partner Loren Schlachet. “But we also made key investments in Outward Hound’s creative, sales and marketing teams to ensure a consistent flow of innovative product releases that captured further market share.”
Riverside further built shareholder value in Outward Hound through operational improvements that increased operating margins, streamlined the supply chain and improved product development. The company also on-shored some manufacturing in order to lower costs. “We were able to find millions of dollars in savings while continuing to expand the company,” said Riverside Principal Steve Rice. “The company not only became bigger, it became more effective and capable during the hold.”
Partner Joe Lee, Operating Partner Bill White, Associate Josh Smith and Finance Director Gary Schlegel worked with Mr. Schlachet and Mr. Rice on the transaction for Riverside.
The Riverside Company is a global private equity firm focused on investing in and acquiring growing businesses valued at up to $400 million. Since its founding in 1988, Riverside has invested in more than 490 transactions and its portfolio includes more than 80 companies. The firm is headquartered in New York with 16 additional US and international offices (www.riversidecompany.com).
“We’re excited about our investment in Outward Hound and the fantastic leadership team that has built one of the fastest growing brands in the pet space,” said J.W. Childs Partner David Fiorentino. “The innovative product portfolio in multiple categories creates exciting opportunities to deliver great products for pet parents and accelerate growth.” J.W. Childs invests in middle market companies based in North America. Sectors of interest include consumer products, specialty retail and healthcare. The firm was founded in 1995 and is based in the Boston suburb of Waltham, MA (www.jwchilds.com).
Outward Hound’s founder, Kyle Hansen, will retain a significant stake in the business alongside J.W. Childs. “Outward Hound will continue creating innovative products in the pet space and could not be more excited about our new partnership with J.W. Childs that will benefit both our retail partners and consumers,” said Mr. Hansen. “We completed four acquisitions over the last three years including Petstages, Dublin Dog, Nina Ottosson and Bionic with the goal now of further expanding our portfolio in current and new categories.”
Denver-based investment bank CapitalValue Advisors (www.capitalvalue.net), which originally introduced Outward Hound to Riverside, was the financial advisor to Riverside on the sale of the company to J.W. Childs.
© 2017 Private Equity Professional | December 13, 2017
