Confluence Watersports sold to J.H. Whitney, plans to expand outdoor business

Confluence Watersports, parent company to eight paddlesports brands, has been sold to private-equity firm J.H. Whitney for an undisclosed amount.

Fellow private equity firm American Capital, which has been an investor since 1998 and owner since 2002, was the seller.

In addition to the sale, officials announced plans “to grow the business into a full-service outdoor recreation company,” changing the name to Confluence Outdoor.

“Confluence has always been an active and invested member of the outdoor industry, and we are fortunate that our new partnership with J.H. Whitney will enable us to build upon our success in paddlesports as a platform for future expansion,” said Confluence CEO Sue Rechner, who will continue to lead the company.

“We will remain committed to the watersports market and continue to grow the category as a leader and innovator,” she told SNEWS in an exclusive first interview. Any new brand to debut in the outdoor space would be relevant to the Confluence customer, and the expansion could come from within the company or through acquisitions. Further details are expected by Outdoor Retailer Summer Market 2014 in August.

J.H. Whitney is no stranger to the outdoor world. Its previous investments include The North Face, Brooks Sports, Eastern Mountain Sports and Igloo, the latter of which it sold earlier this month.

“Confluence has a great platform and we’re going to find ways to strengthen it,” said Paul Vigano, senior managing director at J.H. Whitney. From the firm’s past outdoor experience, Vigano said that product investment is key, along with setting up an effective process for feedback, both from retailers and consumers.

Both Vigano and Rechner acknowledged the seasonality of the watersports business, but stressed that any expansion would be based more on “strategic relevance” versus trying to balance seasonality.

“We’re accustom to seasonal businesses,” Vigano said. Plus, aside from the outdoor entry, the plan is to continue growing the paddlesports core, he said.

Rechner said it’s a good time to be paddlesports business, with plenty of opportunity for growth, whether that be off the excitement surrounding SUP, fishing or watersports apparel and accessories. “Participation can always be a challenge,” she said, “but we see increases in kids and women and it’s important that we continue to cultivate those future consumers.”

Rechner said one the first places the company plans to invest is in consumer insight, feedback and outreach. “We want to stay externally focused on the consumer,” she said. That means more social media engagement and consumer validation of products even before they go to market. The company will also remain focused on specialty retailers, she said, in addition to making some e-commerce investments.

Rechner joined Confluence as CEO in 2007, coming from Victorinox Swiss Army. She’s been credited for helping righten the ship, after the company struggled to integrate numerous kayak and canoe brands in the mid 2000s. Today, Confluence is parent to Wilderness Systems, Dagger, Perception, Mad River Canoe, Wave Sport, Adventure Technology, Bomber Gear and Harmony.

In 2011, Confluence consolidated its operations — including manufacturing, design and engineering, research and development, customer service and sales and marketing teams — into a single 300,000 square foot facility in Greenville, S.C., where it employs 425 people. There’s room to grow and the company will maintain its headquarters there.

–David Clucas

Confluence Outdoor timeline

Early 1970s: Perception was born. The brand’s founder, Bill Masters, is largely credited with creating and nourishing the modern kayak movement. Under Masters’ leadership, Perception pioneered rotational molding of plastic kayaks, a breakthrough that drastically reduced the expense and maintenance associated with composite hulls, and opening up the sport to thousands who otherwise could not afford it.

1971: Mad River Canoe was founded in Vermont by Jim and Kay Henry. The Malecite design (still in use today) was created in the Henry’s woodshed and became their first and now signature boat.

1986: Andy Zimmerman and John Sheppard began attracting attention among their paddling buddies for their innovative composite whitewater kayaks. Word of mouth turned a handful of boats built for themselves and friends into a budding enterprise, and Wilderness Systems was born in North Carolina.

1986: Chan Zwanzig founded Wave Sport by importing a popular UK boat called the Lazer. By 1988, Wave Sport was manufacturing the Lazer itself and by the early ‘90s the company was creating its own innovative models.

1988: Dagger was born out of a loyal following for Joe Pulliam’s slick, high performance whitewater and touring kayaks.

1998: American Capital sponsors the merger of Wilderness Systems and Mad River Canoe, and the new company was named Confluence Watersports.

1999: Confluence adds Wave Sport to its roster and unifies all operations.

2002: American Capital takes over Confluence Watersports.

2005: American Capital supports the acquisition of Watermark, which included Dagger, Harmony paddling accessories, Adventure Technology paddles and Perception.

2010: Confluence Watersports acquires Bomber Gear, a premium watersports accessories brand that specializes in high-quality spray skirts and technical paddling apparel. Founded by Rick Franken in Durango, CO, in 1992, the company relocated operations to Confluence’s Easley, SC, location.

2011: Confluence operations move to current Greenville, S.C. campus.

2014: J.H. Whitney acquired Confluence Watersports. The company becomes Confluence Outdoor and announces plans to grow into a full-service outdoor recreation company.

*Timeline provided by Confluence Outdoor