The golf cart industry is looking to be as expansive and sprawling as the golf courses its products serve, according to Sentinel Capital Partners, which bought Jacksonville, Fla.-based Nivel two years ago this month. Sentinel has since followed up with an add-on acquisition and continues to see greener pastures ahead as the golf cart finds a home outside the game of golf.
The New York-based firm bought Nivel from KODA Enterprises for $30 million in early 2004. Sentinel put $11 million of equity in the deal. American Capital Strategies provided the debt and also invested a small amount of its own equity into the deal. Sentinel won the deal in a limited auction process and credited its relationship with Nivel’s management team with its ability to close the deal.
According to Sentinel, the company has had compounded growth of about 15% over the last two years. A main driver in Nivel’s growth is the increase in the variety of uses for golf carts. When the firm made the acquisition, Sentinel said that 40% of golf carts used today are used for purposes other than transporting golfers, a figure the firm says still holds true today. Senior citizens, public park maintenance workers and airport transportation providers are among the other common alternative users of golf carts.
Last year Sentinel acquired Tucson, Ariz.-based HT Electronics, a provider of motor and motor parts for golf carts and other electric and industrial vehicles. The small, “tuck-in” acquisition increased the company’s presence in the engine parts space. “It was something that really helped out Nivel,” says James Coady, a partner with Sentinel. He says that since the acquisition, HT Electronics’ sales have increased 30%.
Sentinel bought Nivel out of Sentinel Capital Partnership II, which raised $126 million in 1999. After its Nivel acquisition and a run of exits, Sentinel went back on the fund raising circuit and raised Sentinel Capital Partners III with $319