CASE STUDIES
Evenflo Company, Inc.
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Business
Evenflo Company, Inc. (“Evenflo”) designed, manufactured and marketed a broad range of juvenile products including car seats, strollers, safety gates, activity centers and feeding products. Evenflo sold most of its products through five major retailers: Wal-Mart, Target, Babies R Us / Toys R Us, Kmart and Burlington Coat Factory (Baby Depot department).
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Situation
In 2003, Harvest targeted the consumer products industry for investment, with a specific emphasis on companies with strong brands or channel positions. In January 2004, the prior owner began a sale process for Evenflo which was undergoing an operational turnaround. After an extended due diligence period, the Firm acquired Evenflo.
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Harvest Partners Investment
In August 2004, Harvest purchased Evenflo with the existing management team. To fund the acquisition Harvest arranged the debt financing, which included a senior credit facility and a mezzanine note. In addition, Harvest arranged equity co-investment capital for the transaction.
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Investment Thesis
- Strong brand and market leader
- Steadily growing industry
- Potential for significant profitability improvement
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Value Creation
- Market share gains and enhanced brand equity
- Board-level initiative to improve profitability
- Strengthened the management team and Board of Directors
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Outcome
- Sold Evenflo in February 2007 to Weston Presidio.
