Ronin Equity Partners Creates a Diversified Platform in Outdoor Power Equipment and Utility Trailers with Three Simultaneous Acquisitions
July 11, 2022: Ronin Announces Investment in DK2, Currahee Trailers, and SnowBear
Ronin Equity Partners announces the creation, through three simultaneous acquisitions, of the leading North American diversified manufacturer of small- to medium-scale outdoor power equipment and utility trailers. The three merging firms focus on homeowners with more than five acres of land and on small-scale landscapers, ranchers, and farmers. Two of the businesses, DK2 and SnowBear, are based in Ontario, Canada and the third business, Currahee Trailers, is headquartered in Mount Airy, Georgia. The combined company will have over 50 years of operating experience. DK2 pioneered the combination of online ordering (via close partnerships with major home improvement chains like Home Depot and Lowe’s) with door-step delivery of previously difficult-to-package outdoor power equipment and utility trailers.
Operating under the DK2 corporate name, the merged group is the #1 or #2 North American player across more than 250 products in outdoor power equipment and utility trailers. Among the products are a wide selection of woodchippers, snowplows, winches, and utility trailers. The owners and senior management teams of all three companies have retained a significant stake in the merged group and remain actively involved in company management.
“These three firms are helping to create a new category of high-end consumers and small-scale professional users for outdoor power equipment and utility trailers. We see significant growth in this prosumer demand for years to come,” says David Feierstein, Managing Partner of Ronin. “We’ll combine the best of the companies’ manufacturing and delivery models, extend those capabilities to complementary equipment categories, and finance organic expansion and acquisition,” says Ronin Partner Tiffany Bell, who joins DK2 as Chief Financial Officer.
Although the purchase price is undisclosed, on a merged basis the group registers annual revenues in excess of $60 million and shows average annual sales growth over the past five years of 40-plus percent. Ronin has reserved more than $25 million to fund highly synergistic acquisitions for DK2 and is currently in discussions with several targets. More than 35 complementary businesses have been identified.
“This is more than just an investment,” says Steve Malizia, founder and CEO of DK2. “Ronin is bringing us back-office resources and scaling experience, while reinforcing operating muscle so that we can exceed our base potential as a combined group.” At the merged DK2, Malizia will serve as CEO, alongside new Chairman Doug Robinson, one of more than 30 Ronin Operating Advisors – a group that helps source transactions and advises on tactics and strategy. Over a 30-year career, Robinson served as CEO of multiple home improvement, appliance, and building materials companies. A former President of International Operations and Development for Lowe’s Companies - the world’s second largest home improvement company and a major distributor of DK2 products - Robinson headed the group’s e-commerce initiative, helping to build Lowe’s into a strong omni-channel retailer.
Joining Malizia and Robinson on the new DK2 board are four other Ronin Operating Advisors: Jim Core, formerly President of the Professional Division at Home Depot, the world’s largest home improvement company and a major DK2 distributor; Tory Upham, previously General Manager at Dakine, an outdoor equipment company; Gabriel Arreaga, Chief Supply Chain Officer at supermarket giant, Kroger; and Mark Traylor, formerly President of the AMES Companies, one of the largest players in non-powered lawn and garden tools.
The acquisition of the three companies was financed using Ronin’s balance sheet, with investments from a range of limited partners, including Stephens Capital Partners, Northwood Ventures, Knott Partners, and Cardinal Equity.
Ronin and its investors have deployed, or reserved for follow-on portfolio investment, in excess of $350 million. The capital was committed to four platform investments, comprising a total of 14 companies. Apart from DK2, Ronin’s three other buy-and-build platforms cover commercial refrigeration, the specialty cheese industry, and wastewater purification and filtration.
Triago Americas, Inc., acted as the sole placement agent on all of Ronin’s platform investments, including the DK2 transaction. Katten Muchin Rosenman LLP and McCarthy Tetrault LLP acted as Ronin’s legal advisors on its latest platform investment; buyside M&A advisors were Harvey & Company and Robert W. Baird. Debt was provided by Royal Bank of Canada as Lead Left Bookrunner & Administrative Agent; by HSBC and by National Bank of Canada as Joint Lead Arrangers; Desjardin acted as a debt Participant.
