Pitch Best Small Cap 2019: Vendis Capital – Alpine

De genomineerde deals maken dit jaar kans op de M&A Award voor Best Small Cap Deal 2019. Deze pitch is ingezonden door Oscar van Leeuwen van Oaklins. 

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Date deal closed
21 december 2018

Published value
5 – 50 Million

Vendis Capital


Stir it Up Holding

Involved firms and advisors sell side
M&A Advisory: Oaklins (Adse de Kock, Oscar van Leeuwen and Sander van 't Spijker)  Legal advisory: Houthoff (Bram Caudri, Guillette van Grinsven and Floor de Graaff)

Involved firms and advisors target

Involved firms and advisors buy side
Tax Advisory: JSA Tax (Rowdy Schouten and Ronald van de Merwe)  Transaction Services: RSM (Marcel Vlaar, Steef van Kuijen, Mariëla Segers and Stefan Boersma)  Legal advisory: CORP. (Paul van den Belt and Edith Hendriks)

Brief description deal / Deal outline
Vendis Capital, a private equity fund active in the consumer sector, has acquired a 70% stake in Alpine, a leading hearing protection brand, marketing premium products around the globe. Alpine, headquartered in Soesterberg (the Netherlands), develops and markets premium hearing protection products such as its SleepSoft, PartyPlug, MusicSafe Pro and custom made earplugs.

Deal rationale
The market for hearing protection is growing strongly as a result of increasing awareness regarding hearing damage and increasing noise pollution as a result of urbanization. The Netherlands is considered a front runner worldwide in this market with increasing governmental campaigns on hearing protection. The hearing protection market and the image around earplugs are in a way similar to the ski helmet market. A few years ago, earplugs were considered un-stylish and awareness against hearing loss was limited. However, increased awareness and campaigns about hearing loss combined with more adopters during recreational activities are changing the general image of earplugs.

On the back of the aforementioned favorable trends as well as through positioning Alpine as a fashionable brand rather than a protective product, the company’s revenue grew with 20% per annum in recent years. With hearing protection drawing increasing attention in other countries the founders of Alpine realized the enormous growth potential for the company. The seller realized they did not have the financial resources nor experience to facilitate such an international roll-out and approached Oaklins to advise them on a sales process.

Oaklins realized the attractiveness of this asset and advised the sellers to run a limited but highly competitive sales process with only those financial buyers that could add value to Alpine and accelerate its growth path. In a sale to a financial buyers, the sellers would be able to derisk part of the value they have built, while still being able to capitalize on the strong growth potential of the company. In addition, the sellers believed that management with more experience in an international roll-out strategy would be able to add further growth. As a result, they were willing to step back from managing the company and focus on product development and marketing. By teaming up with a financial buyer, the company would be able to better attract talented and experienced management to replace the founders.

In Vendis Capital, the sellers found the right partner that was not only able to offer the best conditions, but also highly experienced in further developing brands and facilitating an international roll-out. In addition, Vendis Capital had already attracted a new CEO and CFO from its own network allowing the sellers to take a step back.

What is the impact of this deal for the company?
The company can further strengthen its market leading position in the Netherlands and has the opportunity to establish a leading position in Europe which is currently still a blue ocean with limited competitors.

What is the impact of this deal for the direct stakeholders?
The sellers still retain a substantial minority stake and are still involved with the company on a part-time basis. They however have also been able to free up time to pursue other interests.

What is the impact of this deal on the society?
In high-income countries it is estimated 49% of childhood hearing loss is preventable. In the Netherlands alone it is estimated that 1.3 million people are hearing impaired and 2.0 million people suffer from tinnitus. Hearing loss related problems are estimated to cost the Dutch society alone roughly EUR 6.8 billion annually.

Why does this deal deserve a nomination?
By running a focused process with a limited number of only the most logical potential buyers, the company and Oaklins were able to spend a lot of time on educating all buyers on the growth potential of the market and the company. As a result, the sellers had the opportunity to select the buyer that not only offered the best conditions but also best equipped to support the further growth of Alpine. This allowed the sellers to take a step back whilst still retaining a significant minority stake. The company meanwhile is perfectly positioned under the wings of Vendis to capitalize on the strong growth potential and contribute significantly to hearing protection in the European and potentially global market.

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