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Thule Inc. has been acquired for approximately $595 million by UK private equity firm Candover Partners Ltd. — www.candover.com. The announcement of the sale comes four months after former owner EQT Partners EB, a Swedish private equity firm that purchased Thule five years ago, announced it would be seeking to take Thule public. Rumors that EQT was also conducting a dual-track strategy by exploring other buyers for Thule proved accurate. Debt financing is being provided by Royal Bank of Scotland.
It has been estimated that EQT made nearly four times the amount it invested originally when it purchased Thule from Swedish business Eldon in 1999.
Candover has a history of insisting management takes a partial ownership in any investment the firm makes, and the Thule acquisition is no different. Approximately 60 members of Thule’s internationally-based management team, including Fred Clark, president of Thule Inc., will have a 20 percent equity stake in the new ownership structure.
Thule continues to be on a sales tear internationally which, according to the company, places it with a 40 percent market share worldwide. Net sales from January to September 2004 are approximately $307 million USD, up 23 percent over the same period in 2003. Operating profits and cash flow are also both up significantly. Breaking out the United States alone, it appears as if Thule Inc. accounts for 24 percent of Thule’s overall worldwide sales.
SNEWSÂ® View: No surprise really. EQT had been holding its investment in Thule for five years — about the time most equity firms start to seek a buyer so the firm can cash out and realize a gain on its investment. Candover is a very strong buyer, with a buy/sell sheet that boasts over 121 investment deals since the firm was founded in 1980. Insiders tell us the firm invests only in those companies with a strong growth potential (Thule is planning 10 percent growth each year for the next few years) and planned acquisitions already on the books to help fuel that growth. Candover has also successfully taken 85 percent of the companies the firm has backed either public or onward to another buyer.
So, what does this mean for Thule Inc., the U.S.-based, wholly-owned subsidiary of the Thule Group? Not much reallyâ€¦at least as far as retailers are concerned. Thule Inc. continues to invest toward expansion of market share through organic growth and acquisition. The Seymour, Conn., facility is two-thirds of the way along a 28,000-square-foot expansion to accommodate growth.
Like the Euro side of the business, which just acquired a snow chain company, we suspect Thule Inc. is actively seeking other acquisitions that are inline with the company’s mission and vision to expand its presence in providing products for accessorizing vehicles. Though we doubt you will read about any new acquisitions before January 2005, it is likely that in the first quarter of 2005, we might be telling you about acquisitions involving camper shells for trucks since that is an obvious white area for Thule.