Praesidian Capital has acquired a controlling interest in Round 2, a hobby products company.
Round 2 designs and produces model kits, diecast models, slot cars and other hobby products. The company is the owner of several well-known model kit and diecast brands, many of which date back to the 1960s, including AMT, Hawk, Johnny Lightning, MPC, Lindberg, Auto World and Racing Champions. In addition to its company-owned brands, Round 2 has numerous band licensing agreements with General Motors, Ford, Star Trek, Star Wars and other well-known brands.Round 2 sells its products through major retailers including Walmart, Target, and Hobby Lobby and through its e-commerce platform – www.autoworldstore.com.
Round 2 was founded in 2007 by CEO Tom Lowe and is headquartered in South Bend, Indiana. “I’m thrilled to be partnering with the Praesidian team as they will bring significant resources as we continue to scale the business, both organically and through acquisitions,” said Mr. Lowe.
“Product design and innovation will always be at the core of Round 2’s growth strategy but we also believe there is significant consolidation opportunity within the highly fragmented collectibles space,” said Glenn Harrison, a partner at Praesidian. “We will be working closely with the Round 2 team to continue to build on its already impressive list of brands.”
The buy of Round 2 is the second platform company acquired by Praesidian under its new strategy to make control investments in lower-middle market businesses that have enterprise values from $1 million to $100 million. Typical investments will have revenues of $3 million to $100 million and EBITDA of $250K to $20 million.
In December 2019, Praesidian acquired a genetic-focused clinical and laboratory services company that specializes in the prenatal and preconception field and it also provides hereditary cancer risk assessments. Praesidian has not revealed the name of this acquisition.
“We are pleased to have closed on another platform company,” said Tom Duffy, a managing director at Praesidian. “Round 2’s brands are well-known within the collectibles industry and the company has an impressive track record of growth.”
Praesidian was founded in 2002 and has been an active provider of senior and subordinated debt along with growth capital to lower middle-market businesses in the United States, United Kingdom, Germany, and selectively in Northern Europe.
© 2021 Private Equity Professional | January 26, 2021