After EBITDA Quadruple, Kian Exits Driven Lighting Group

After EBITDA Quadruple, Kian Exits Driven Lighting Group

Over Kian’s three-and-a-half-year ownership term two add-ons were closed with buys of XenonDepot and Headlight Revolution in 2019

DLG's products include lighting assemblies, bulbs, off-road and accent lighting sold under the the Morimoto, Profile Performance, GTR Lighting, Xenon Depot, and Acme brands

SOURCE: Driven Lighting Group

Kian Capital Partners has sold Driven Lighting Group (DLG) to Wheel Pros, a portfolio company of Clearlake Capital.

Atlanta-based DLG designs, markets and distributes performance and enthusiast automotive aftermarket lighting products – including complete assemblies, bulbs, off-road and accent lighting – under the Morimoto, Profile Performance, GTR Lighting, Xenon Depot, S-V.4, and Acme brands.

The company’s branded products and third-party brands – Koito, Stanley, Philips, Osram, Denso, and Matsushita – are sold through numerous e-commerce sites including Headlight Revolution, The Retrofit Source, and LED Concepts.

Kian acquired DLG, then The Retrofit Source (TRS), in March 2018. TRS was founded in 2005 by Matt Kossoff, and CEO Brian Reese joined the company in April 2020. Mr. Reese is a former CEO of Race Winning Brands, a portfolio company of Kinderhook.

During Kian’s three-and-a-half-year ownership term, DLG quintupled revenue and quadrupled EBITDA by expanding the company’s online presence, marketing strategies, and operating infrastructure; and closing two add-ons with the buys of XenonDepot in January 2019 and Headlight Revolution in March 2019.

“DLG has shown outstanding performance since we first partnered with Matt Kossoff and the team, and we’re glad we were able to achieve an outcome the DLG team desired in terms of finding a home where they believe they can accelerate their rapid trajectory,” said Rick Cravey, a partner at Kian Capital. “This investment represents a perfect case study of what we do at Kian: provide first institutional capital to innovative entrepreneurs, and then work closely with management teams to build out systems, teams and facilities and make acquisitions through thesis-driven growth strategies. We are proud to have partnered with DLG over this period of growth and look forward to following the company in its next chapter with Wheel Pros.”

Wheel Pros is a designer, marketer, and distributor of more than two dozen branded automotive aftermarket wheels, performance tires, and accessories. The company was owned by Platinum Equity before being sold in 2014 to Audax. In March 2018, Clearlake acquired Wheel Pros from Audax.

Wheel Pro’s branded products – including Fuel-Off-Road, American Racing, KMC, Rotiform and Black Rhino – are distributed through more than 30 distribution centers across the United States, Canada, and Australia, and its products are sold through more than 13,500 online and brick-and-mortar retailers.

Wheel Pros was co-founded in 1995 by CEO Randy White and is headquartered near Denver in Greenwood Village, Colorado.

Just this week, following the buy of DLG from Kian, Wheel Pros announced that it had acquired Hoonigan, a California-based automotive enthusiast brand and online seller of automotive performance products.

Clearlake invests in industrials and energy; software and technology-enabled services; and consumer sectors. The firm was co-founded by Jose Feliciano and Behdad Eghbali in 2006 and is headquartered in Santa Monica, California with an additional office in Dallas, Texas. In April 2020, Clearlake held a hard cap and oversubscribed final close of its sixth private equity fund, Clearlake Capital Partners VI LP, with more than $7 billion in commitments.

Charlotte and Atlanta-based Kian Capital makes both control and minority investments of $7 million to $30 million of equity and subordinated debt in companies that have revenues of $10 million to $100 million and EBITDA of $2 million to $15 million. Sectors of interest include consumer, services, specialty manufacturing and value-added distribution. In March 2018 the firm held a final hard-cap closing of KMP II LP with total capital of $275 million.

The sale of DLG is the first exit by Kian of its three platform investments in the automotive aftermarket sector with The Eastwood Company, a Pennsylvania-based provider of auto aftermarket tools, consumables and supplies (acquired in April 2019); and T Sportline, a California-based provider of branded aftermarket parts and accessories designed specifically for Tesla vehicles (acquired in June 2021), as the two remaining portfolio companies.

VRA Partners was the financial advisor to Driven Lighting Group on this transaction.

© 2021 Private Equity Professional | September 24, 2021

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