Remington Products Company, the leading US specialty designer and manufacturer of branded and private label orthotics, has been acquired by Gridiron Capital, a leading middle-market private equity firm.
Prior to engaging Cascade Partners, Remington received a compelling, unsolicited offer from a New York-based private equity firm. They struggled between accepting the offer and checking the market to ensure they were getting the right value.
The company, being an ESOP, was focused on getting an attractive price for the business and partnering with the right team to build on their history of success. They nearly accepted the unsolicited offer, concerned about confidentiality issues if a full sales process was pursued. They also did not want to risk losing the “bird in the hand” nor were they confident an investment banker could achieve a significantly higher price.
How Cascade Helped Through The Acquisition Process
As a result of Cascade Partners’ work and experience with the management team and many of the Company’s advisors, we were able to provide data, insight and perspective to address the leadership team’s concerns.
In addition, Cascade structured a fee schedule that would align interests and objectives between Remington Products Company and Cascade Partners. We mapped out a plan for keeping the existing private equity firm engaged and completed considerable up-front research and completed several pre-marketing conversations. This allowed our team, at Cascade Partners, to focus on the highest potential buyers, thereby reducing confidentiality concerns and keeping an aggressive time frame.
With our innate understanding of the clients’ dual goals of price and partnership fit, Cascade Partners was able to market Remington to a pre-screened, carefully-selected list of potential partners creating efficiency from the beginning. Cascade Partners was also able to work with Gridiron Capital, the final purchaser, to navigate the complexities of the ESOP structure and maximize the outcome for the client. We were engaged by Remington Products Company in October 2018. The transaction process was completed in April 2019.
The transaction moved from letter of intent to closing in only 50 days.
“The team at Cascade Partners helped us identify our goals and understand all the options available to us. But more importantly, they helped position us to maximize value with our preferred partner in an efficient, timely manner,” said Rhonda Newman, Chief Executive Officer of Remington Products Company.
Remington’s decision to hire Cascade Partners achieved the critical objectives of the company, the Employee Stock Ownership Plan and the employees. As a result of this effort, the final value secured for the Company fully recognized the stability and long-term potential of the Company. This was due to the fact, in part, several of the prospective partners knew the industry very well and recognized Remington Product Company’s strong culture, outstanding leadership team and enviable position within its product lines.
The sale of Remington Products Company to Gridiron Capital represents the “American Dream” come true due to the significant value generated and the diversified ownership among the company’s approximately 140 domestic employees.
Three specific elements of Cascade’ process resulted in an outcome that surpassed all expectations of our client:
- Cascade created a targeted, carefully-selected and pre-screened group of partners through methodical research and multiple industry conversations.
- Cascade marketed the business from the perspective of the potential buyer which attracted the right buyer universe to the opportunity.
- Cascade teamed effectively with Remington and aligned goals, creating a “one team” dynamic.
Rhonda Newman (00:01): Rhonda Newman, I’m the CEO and president of Remington Products. Remington is a manufacturer of health and wellness products. So we manufacture both for our OEM customers and our own leading brands, such as PowerStep, which is the number one medically recommended insole orthotic on the market. We had an initial offer before we kicked off the process. And so Cascade was able to get us through a very quick process while keeping that party engaged. So we received an unsolicited offer as an ESOP company. We weren’t looking to sell, but we received a very attractive offer and we were considering taking this offer. But as part of our diligence, as fiduciaries of the retirement plan being ESOP company, we knew that we needed to go through a process to ensure that we were getting the best market price for our employee shareholders.
Rhonda Newman (00:53): And when we spoke with Cascade, they understood our concerns and we communicated that to them. And we felt very comfortable partnering with them as an advisor to get us through a quick process, confidential process, and really get us the price that we needed too for our employee owners. Cascade Partners more than delivered. We had a very quick process and a great outcome. So not only did we have multiple offers, but we had offers that were multiples higher than that first unsolicited offer. And ultimately we ended up with a better partner for the business.
Rhonda Newman (01:31): On a personal note, I really appreciated working with Cascade because this process is tough. We felt very comfortable with Cascade, that they were available to us at any time that we had questions. They had great rapport with the management team. We had fun through the process. We joked, we laughed, which when it gets challenging, that really helped. The most value was we got a deal done quickly at an incredible price. Pick a partner that understands your concerns, that you’re aligned with, that has your best interests at heart. That is going to work with you, that you feel comfortable with. Because at some point it will get difficult and having a partner like Cascade Partners that you can trust is critical.