Sponsor: MidOcean Partners
Target: Millett Industries
Acquisition Platform: Bushnell Outdoor Services
Seller: Millett family (founders)
Financial Advisor: Seller: Acquisition Services Group; Buyer: None
Legal Advisor: Sponsor: Kirkland & Ellis LLP; Seller: Tonkovich Professional Corp.
With its second add-on of the summer,
In a deal expected to close later this month, Bushnell agreed to acquire family-owned Millett Industries, a maker of riflescopes and scope mounting hardware geared toward S.W.A.T.-type tactical law enforcement use. New York-based MidOcean Partners was approached by the Millett family, which was looking to strike a deal to monetize their positions in the company.
MidOcean Partners, which aqcuired Bushnell Outdoor Services last summer, liked Millett Industries’s strong reputation in “rings and mounts,” the hardware used to fix scopes onto rifles. “It fits in nicely with [Bushnell’s] strength in the rifle scope category,” said David Basto, a principal at MidOcean who worked on the deal. “It’s a nice complimentary product line.”
Uncertainty stemming from the challenging economic climate played a role in the Millett family’s decision to seek a buyer for the company, said Phil Gyori, vice president of marketing at Bushnell. “I’m not saying Millett was struggling,” Gyori explained. “But a lot of small companies are up against capital requirements and [struggle with] having the financial wherewithal to continue to keep expanding, and that’s something we offer.”
Over the last 10 years Bushnell’s sales have seen compounded growth of about 11 percent to 12 percent from both add-ons and organic growth, Gyori said. Both Basto and Gyori declined to go into financial details related to Bushnell and the Millet Industries deal.
Bushnell, based in Overland Park, Kan., is known best for its riflescopes, binoculars and laser rangefinders used to measure distance between a hunter and its target. In the United States, Bushnell distributes its products to independent stores, regional chains and big box outlets such as Sports Authority, Target and Wal Mart. The company also reaches international markets through its offices in Australia, Canada, France and Hong Kong.
The acquisition of Millett Industries promises to steer Bushnell deeper into the law enforcement market, where the company already has some exposure through its Uncle Mike’s brand of handgun holsters. Bushnell expects to leverage its existing sales and distribution infrastructure in that market to expand the reach of Huntington Beach, Calif.-based Millett Industries’s products. “There are a lot of opportunities to grow Millet just by getting it into new channels and new customers,” especially in the international markets, Gyori said.
The acquisition of Millett Industries represents the eighth tack-on to Bushnell since 2001. In June the company took over its competitor in the hunting scope market, Simmons Outdoor Corp., buying it for $7.25 million from troubled optical equipment manufacturer Meade Instruments Corp. (Nasdaq:MEAD). “We had an opportunity to acquire it under pretty attractive terms,” Gyori said.
Bushnell first fell into private equity hands in 1999 when Chicago-based