Sentinel Takes Holley Public Through MidOcean SPAC

Sentinel Takes Holley Public Through MidOcean SPAC

Holley, a portfolio company of Sentinel Capital Partners, has agreed to merge with Empower, a NYSE-traded special purpose acquisition company formed by MidOcean Partners.

Sentinel’s investment in Holley began in 2015 with the acquisition of Driven Performance Brands, a Santa Rosa, California-based manufacturer of automotive aftermarket performance products for car and truck enthusiasts. At that time, Driven’s brands included Flowmaster, B&M Racing, Hurst, and Dinan Engineering.

In August 2017, Driven acquired APR, a provider of performance aftermarket products for Audi and Volkswagen vehicles. Just over a year later, in October 2018, Sentinel acquired Holley Performance Products from Lincolnshire Management. Based in Bowling Green, Kentucky, Holley is a marketer and supplier of high-performance carburetors, manifolds, superchargers, water pumps, fuel injectors and fuel pumps for street and race applications. Brand names include Holley, Sniper EFI, MSD, Accel, Hooker, Diablosport, Superchips, and Edge.

When the merger of Holley and Empower is completed, expected in the second quarter of 2021, Holley will become a publicly listed company on the NYSE under the new ticker symbol “HLLY”. Sentinel will remain the company’s largest shareholder with Holley’s president and CEO, Tom Tomlinson, continuing to lead the company.

According to Sentinel, this transaction values Holley at $1.55 billion, or 9.8x projected 2021 pro forma Adjusted EBITDA of $159 million. In 2020, Holley’s net sales were approximately $580 million with EBITDA of $145 million.

“Holley was built by automotive enthusiasts for automotive enthusiasts, a passionate and active market that spends on the products that they love,” said Mr. Tomlinson. “Today’s announcement marks the beginning of the next chapter of Holley’s journey to fuel our customers’ automotive passion. With our flexible capital structure, we expect to accelerate growth across existing products and channels, as well as continue to pursue attractive opportunities in adjacent categories, both organically through developing innovative new products and making strategic acquisitions.”

“We are enthusiastic about Holley’s future prospects and believe the company will be able to execute its compelling growth plans as a public company,” said James Coady, a partner at Sentinel. “We have helped Holley to grow organically and through transformational acquisitions and are immensely proud of what we have achieved in our partnership with Holley’s hugely talented management team. We are excited to continue supporting Tom and his team while leveraging the experience of our new partners at Empower.”

New York City-based Sentinel Capital invests in management buyouts, recapitalizations, corporate divestitures, and going-private transactions of businesses with EBITDAs up to $80 million. Sentinel targets eight industry sectors: aerospace and defense, business services, consumer, distribution, food and restaurants, franchising, healthcare, and industrials.

William Blair & Company, Jefferies, and Lazard Middle Market are the financial advisors to Holley.

© 2021 Private Equity Professional | March 17, 2021

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