Target: Zodiac Recreational
Sponsor: OpenGate Capital
Seller: Zodiac Marine & Pool, Carlyle Group
OpenGate Capital is looking to buy companies that make marine recreational products in the United States, Asia and South America for its latest platform, firm Founder Andrew Nikou told Buyouts.
The Los Angeles-based firm recently acquired Zodiac Recreational, a subsidiary of Carlyle Group-backed Zodiac Marine & Pool that designs and manufactures inflatable boats for businesses and consumers. Terms for the deal, expected to close in 90 days, were not released, though Nikou said his firm is financing it with all equity.
The company is based in France and has operations internationally already. But OpenGate’s thesis relies in part on accelerating that expansion and broadening the company’s offerings to include other marine recreational products, such as stratospheric balloons, Nikou told Buyouts. Though the deal isn’t closed yet, Nikou said the firm has identified two potential acquisition targets.
“The business has significant market share, and we thought it would serve as a strong platform to expand its product offering with select acquisitions we’ve identified,” Nikou said.
Nikou, who started his career with fellow Los Angeles-based turnaround shop Platinum Equity, founded OpenGate in 2005. His firm, which has 17 investment professionals, follows a similar strategy with a special interest in technology, media and entertainment; paper and packaging; the automotive sector; and consumer retail.
The firm also specializes in international deals: seven of the 12 companies in its portfolio are based outside of the United States, in Europe and Latin America. That’s a somewhat unusual global reach for a relatively young, U.S.-based firm.
Nikou and his colleagues finance their deals out of their own pocket, he said. The firm does plan to raise its own institutional fund, but Nikou said that is still a few years out. In the coming weeks the firm should ink its largest exit yet, which should help the firm in building its track record, he said (OpenGate also has four other realizations, according to the firm).
“We’ve made some notable investments,” he said. “We’d like to exit those before we go out to the marketplace to raise capital.”
Executives at the Carlyle Group declined to comment. A press release announcing the deal, however, notes that the divestiture is part of Zodiac Marine & Pool’s “ongoing strategy to refine and refocus its business in the military, professional, and clean water industries.”
Carlyle Group bought the Paris-based company, then a division of French company Zodiac SA, now known as Zodiac Aerospace SA, in 2007 in a deal valued at the time at $1.01 billion.