pet supplies

Riverside Sells Outward Hound to J.W. Childs

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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

Roark Acquires Pet Supermarket

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Roark Capital Group has acquired Pet Supermarket, a pet specialty retailer, from Charles West, Jr., the company’s founder.  Pet Supermarket will remain headquartered in Sunrise, FL, and continue to be led by Diane Holtz, its Chief Executive Officer. Pet Supermarket is Roark’s fourth investment in the pet specialty sector.

Pet Supermarket operates 155 pet specialty retail stores in 11 states and generates approximately $300 million of annual revenue.  The company has more than 10,000 SKU’s and sells premium and holistic pet food and a wide variety of pet supplies for dogs, cats, birds, fish, reptiles and other small critters like gerbils and hamsters. The company was founded in 1973 as Pet Circus and was renamed Pet Supermarket in 1986 (www.petsupermarket.com).

“We are pleased to welcome Pet Supermarket to the Roark family,” said Ezra Field, Managing Director of Roark Capital.  “Diane and her team operate a terrific pet specialty chain with friendly, knowledgeable staff that is clearly committed to customer service.”

“We are excited to have Roark as our growth partner,” said Ms. Holtz.  “Roark brings to us incredible resources, consumer retail knowledge, and a collaborative approach to working with its portfolio companies that will enable us to accelerate Pet Supermarket’s growth.”

Financing for the transaction was arranged by Golub Capital.  Pet Supermarket was advised by Houlihan Lokey.

Roark Capital Group invests in consumer and business services companies, with a focus on the franchise, food and restaurant, specialty retail, environmental services, waste management, and marketing services sectors. In December 2014, Roark held a final close of Roark Capital Partners IV LP at its hard cap of $2.5 billion.  Since founding in 2001, Roark has raised over $6 billion of equity capital commitments.  The firm, headquartered in Atlanta, takes its name from Howard Roark, the protagonist in Ayn Rand’s “The Fountainhead” (www.roarkcapital.com).

2015 PEPD • Private Equity’s Leading News Magazine • 5-14-15

Harbinger Looks to Acquire Central Garden & Pet Company

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Harbinger Group has today released its most recent letter to the Board of Directors of Central Garden & Pet Company which outlines an acquisition of Central Garden & Pet for $10 in cash per share or alternatively to acquire Central Garden & Pet’s Pet Segment for $750 million in cash.

Central Garden & Pet Company produces and sells various products for the pet, and lawn and garden supplies markets in the United States. The company operates in two segments, Pet, and Lawn and Garden.

The Pet segment supplies products for dogs and cats comprising edible bones, edible and non-edible chews, dog and cat food and treats, toys, pet carriers, grooming supplies, and other accessories; and food, cages and habitats, toys, chews, and related accessories for birds, small animals, and specialty pets. It also offers animal and household health, and insect control products; aquariums, furniture and lighting fixtures, pumps, filters, water conditioners, food and supplements, and information and knowledge resources for fish, reptiles, and other aquarium-based pets; and products for horses and livestock. This segment sells its products to independent pet distributors, retail chains, grocery stores, mass merchants, and bookstores under various brand names, which include Adams, Aqueon, Avoderm, BioSpot, Farnam, Four Paws, Kaytee, Nylabone, Pinnacle, TFH, Zilla, Altosid, Comfort Zone, Coralife, Interpet, Kent Marine, Oceanic Systems, Pet Select, Pre-Strike, Super Pet, and Zodiac.

The Lawn and Garden segment provides grass seeds; wild bird feed, bird feeders, bird houses, and other birding accessories; weed, grass, ant and other herbicide, insecticide, and pesticide products; and decorative outdoor lifestyle and lighting products, such as comprising potteries, trellises and other wood products, and holiday lighting products. This segment sells its products to retail chains, independent garden distributors, grocery stores, nurseries, and garden supply retailers under the AMDRO, GKI/Bethlehem Lighting, Ironite, Pennington, Sevin, Grant’s, Lilly Miller, Matthews Four Seasons, New England Pottery, Norcal Pottery, Over-N-Out, Smart Seed, and The Rebels brand names.

Central Garden & Pet was founded in 1955 and is based east of San Francisco in Walnut Creek, CA (www.central.com).

Harbinger Group Inc. is a diversified holding company with operations in life insurance and annuity products; branded consumer products; asset-backed loans; and energy assets. HRG is principally focused on acquiring controlling and other equity stakes in businesses across a range of industries and growing its existing businesses. In addition to HRG’s intention to acquire controlling equity interests, HRG may also make investments in debt instruments and acquire minority equity interests in companies. HRG is headquartered in New York and traded on the New York Stock Exchange under the symbol HRG (www.harbingergroupinc.com).

2014 PEPD • Private Equity’s Leading News Magazine • 6-23-14

Kinderhook Exits Absorption Corp.

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Kinderhook Industries has sold its portfolio company IAX Acquisition Corporation, parent company of Absorption Corp., to J. Rettenmaier & Söhne Group.

Absorption Corp. is a manufacturer of organic fiber products primarily used for small-animal bedding and litter. The company’s portfolio of brands includes CareFRESH, Healthy Pet, and CritterCare and its products are sold at pet-specialty stores, mass merchandisers and grocery chains throughout North America, Europe and Australasia. The company is headquartered in Ferndale, WA (www.absorptioncorp.com).

Kinderhook acquired Absorption in 2010 and the sale, including prior distributions, will result in a return on invested capital of approximately 2.4x for Kinderhook Capital Fund III. The sale of Absorption is the first realization in this fund.

Kinderhook’s guidance and support has been instrumental in getting Absorption to this important day,” said Ted Mischaikov, CEO of Absorption Corp. “Our partnership with Kinderhook has been tremendously beneficial to the company and will continue to pay dividends for Absorption for many years to come.”

Kinderhook Industries is a manager of private equity funds with $770 million of committed capital. Kinderhook primarily makes control investments in companies with transaction values of $25 million to $100 million in which the firm can achieve financial, operational and growth improvements. Kinderhook pursue private equity investments in non-core divisions of public companies, management buyouts of entrepreneurial-owned businesses, troubled situations and existing small capitalization companies lacking institutional support. The firm is based in New York (www.kinderhook.com).

“Kinderhook is very proud of the accomplishments of the company’s management team and hard-working employees over the past three years,” said Tom Tuttle, Managing Director at Kinderhook. “Ted Mischaikov and his team have successfully expanded Absorption’s market-leading bedding products into new channels and geographies, and launched several new, innovative products for the small animal market. Additionally, they have concurrently improved both product quality and company profitability, which is truly exceptional. Absorption has a bright future ahead of it, especially under its new strategic partnership with J. Rettenmaier & Söhne Group.”

J. Rettenmaier & Söhne Group (JRS) is a manufacturer of organic fibers made from plant raw material, for use in a range of applications within the pet care, food, nutrition, pharmaceutical, chemicals and construction industries. The company’s pet care offerings include pet litter and pet bedding products. JRS was founded in 1878 and is headquartered in Rosenberg, Germany. The company operates 23 facilities in 20 countries throughout the world (www.jrs.de).

Harris Williams & Company served as exclusive financial advisor to Absorption Corp. and Kirkland & Ellis served as its legal counsel.

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-15-13