The Deal:

Mid-market Private Equity firm identified an asset for their consumer brand portfolio. This company is a leading athletic equipment, apparel, and footwear designer that has established a powerful brand in a niche sports market with products sold DTC and through national retailers.

Key pre-close concerns included: manufacturing in multiple countries, integration with supply chain processes at several large national distributors, and growing a DTC channel complementary with wholesale.

 

Deal Thesis:

  • EBITDA growth of 2x - 2.5x

  • Expansion into other sports / channels through organic growth and future acquisitions

  • Enhancement of DTC channel leveraging a recent acquisition

  • Scale through operational leverage and deployment of appropriate technology

Sabio Results:

Sabio’s rapid 4 week technology diligence validated a number of key assets identified pre-LOI. We also uncovered several liabilities and opportunities to better align the target’s tech ecosystem with the investors Value Creation Agenda. These included: protection of key intellectual property, key vendor risk with an offshore software development resource, challenges with scaling core warehouse management, fulfillment, and financial systems.

We also made a number of post-close recommendations for scaling warehouse operations, DTC channel sales, and hardening supply chain applications through improved use of technology.