Acquiring Minds

Exiting For Millions Vs Long Term Hold

with Don Grigg · Big Adventures / Native Watercraft / Liquid Logic Kayaks / Bonafide Kayaks

LenderHawk analysis. Not affiliated with or endorsed by Acquiring Minds.

The Deal

Business

Big Adventures / Native Watercraft / Liquid Logic Kayaks / Bonafide Kayaks

Industry

Kayak Manufacturing and Custom Plastics Molding

State

Year

2002

Revenue at Purchase

$22.0M

Deal Source

proprietary

Strategic Rationale

Identified a small, struggling custom plastics molding business with an early-stage kayak product line; recognized the custom molding business would require scale to be profitable and that the kayak brand could provide that scale and growth opportunity.

Post-Acquisition Performance

Over 22 years, transformed the business from an unprofitable subscale operation with 18 employees and $2 million in revenue into a market leader with 110 employees and $22 million in combined revenue across kayak brands and custom molding; established four kayak brands and achieved number-four market position in specialty kayak industry; made strategic acquisitions of Legacy Paddle Sports (2015) and Bonafide Kayaks (2018); maintained highly profitable custom molding division serving 50 customers with 150 different parts.

Key Takeaways

1Subscale factories are inherently unhealthy; combining custom job shop work with branded product lines can achieve necessary operating scale and profitability
2Job profitability must be understood at granular level in custom manufacturing; activity-based costing by part and customer is essential for sustainable margins
3Customer retention in custom molding is extremely high once relationships are established, but growing custom business is difficult; diversification into own-brand products provides growth engine
4Long-term family business ownership allows for values-based management, employee loyalty, and care that private equity acquisitions typically cannot sustain
5Entrepreneurship through acquisition is 95 percent execution and 5 percent strategy; success requires daily blocking and tackling, not just deal-making

Matched SBA Loan Records

SBA loan filings we matched to this deal

Minnesota Business Finance Cor85%

$169KFY2022

Magnifi Financial CU85%

$83KP + 2.00%FY2021

Clear Fork Bank National Association85%

$88KP + 2.25%FY2022

The Deal

Business

Big Adventures / Native Watercraft / Liquid Logic Kayaks / Bonafide Kayaks

Industry

Kayak Manufacturing and Custom Plastics Molding

State

Year

2002

Revenue at Purchase

$22.0M

Deal Source

proprietary

Strategic Rationale

Post-Acquisition Performance

Key Takeaways

1Subscale factories are inherently unhealthy; combining custom job shop work with branded product lines can achieve necessary operating scale and profitability

2Job profitability must be understood at granular level in custom manufacturing; activity-based costing by part and customer is essential for sustainable margins

3Customer retention in custom molding is extremely high once relationships are established, but growing custom business is difficult; diversification into own-brand products provides growth engine

4Long-term family business ownership allows for values-based management, employee loyalty, and care that private equity acquisitions typically cannot sustain

5Entrepreneurship through acquisition is 95 percent execution and 5 percent strategy; success requires daily blocking and tackling, not just deal-making