In September 2021, Domestic reached an agreement with Igloo, a major player in the US cooler market. The Sweden-based company will acquire the company for $677 million on a cash- and debt-free basis, using internal funds to complete the transaction.
This deal is expected to result in higher sales for both brands and was completed with the help of Hauser Private Equity and Acon Investments. We look more at the details of the sale and what the major players hope to accomplish.
Facts and Figures
Here are the fast facts about the transaction:
- Projected to add $150 million more in annual sales
- Cost benefits due to enhanced supply-chain and distribution are expected to result in a $5 million savings per year.
- The earn-out element is a maximum of $223 million.
- Igloo’s total annual EBITDA improvement is expected to reach $50 million in five years.
Hauser Private Equity was not the lead on this deal, though its founder was kept apprised of information throughout the transaction due to its stake in Igloo. Pending regulatory approvals, the deal is expected to close by the end of 2021.
How Both Companies Stand to Gain
Igloo is Domestic’s 8th acquisition for the year, a notable accomplishment for the global brand. After amassing $1.9 billion in revenue in 2020, Domestic saw an opportunity to leverage its holdings and expand its position in the market. 2021 has been a busy year and the company shows no signs of slowing down.
This transaction was a natural arrangement given the demand in the US markets. Right now, the outdoor segment is seeing an increase in interest in lower-ticket items. That means more people investing in quality items without having to invest a good portion of their paychecks along with it. Igloo is the perfect brand to meet the need in this segment with its affordable coolers and drinkware.
Domestic is known for its higher ticket items, such as boats and campers, its sales are largely cyclical (e.g., people purchase watercraft during spring and summer). With the purchase of Igloo, Domestic can enjoy stronger sales in North America under its Global segment umbrella.
There are no current plans to change to the Igloo brand, which is already featured in 110,000 storefronts across the country. However, in addition to growing its presence in the country, the financial resources of Domestic may very well spark new lines bearing the Igloo name in the future.
Carving Out a Bigger Space in the Markets
The partnership is very much aligned with the way that Hauser Private Equity does business. Largely focused on the middle and lower markets, the company looks for ways to provide growth wherever possible.
Without discounting the very real competition from other brands in the market, the $8 billion cooler and drinkware segment are very much on the rise as of late, particularly as people look for more open spaces. Igloo and Domestic both stand to see a significant rise in their share of sales now that they’re partners.