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Inside the exit: Victor Capital ‘exceeded our goals’ while owning PrimaLoft for five years

PrimaLoft's EBITDA and revenue grew 2.5x while MOIC was reportedly north of 7.5x, according to a source familiar with the sale to Compass Diversified.

Victor Capital Partners, a New York based mid-market investor in consumer, industrial and business services, on Monday announced the sale of PrimaLoft, a well-known company that makes synthetic insulation for a wide range of consumer products, including outerwear, to Compass Diversified for $530 million.

Victor acquired a majority interest in the company in 2017. During Victor’s hold period, PrimaLoft’s EBITDA and revenue grew 2.5x while multiple on invested capital was reportedly north of 7.5x, according to a source familiar with the deal.

PE Hub caught up with Douglas Korn, Victor founder and managing director, to reflect on the five years the firm controlled PrimaLoft.

“It’s been a very exciting story of growth, of operational excellence, innovation, brand building, and we give a lot of credit to the very talented management team,” led by chief executive Mike Joyce, said Korn. Management held about 10 percent of the business under Victor’s ownership.

PrimaLoft increased market share by delivering better products that are more sustainable and easier to use, Korn asserted.

“I would say with all confidence that we exceeded our goals operationally, financially and in terms of impact to our employees, the customers and the environment,” said Korn. “It’s been an absolute pleasure to be associated with this company.”

PrimaLoft provides components such as insulation technologies of non-woven and other textile markets for outdoor brands, such as Patagonia, Helly Hanson, LL Bean, and Arc’teryx; atheletic brands, including Nike, Adidas, lululemon and Athleta; and fashion and lifestyle brands, such as Polo Ralph Lauren, Stone Island, J.Crew and Prada.

Douglas Korn, Victor Capital Partners

Korn described PrimaLoft as a resilient company that was “never severely impacted” by the global supply chain challenges that rocked most businesses during the pandemic. He said the company has an outsourced manufacturing model that helped weather the supply chain challenges.

The company uses recycled materials, part of it from ocean plastics, a move that complements its mission to reduce carbon footprint and make way for sustainable technologies, Korn said.

As part of the transaction, PrimaLoft employees will receive some of the proceeds from the deal in line with the PrimaLoft Prosperity Plan, which was put in place to ensure that all employees benefit financially from the growth and success of the business. This was after a separate incentive plan was initiated for top management.

About the sale process, Korn said: “Generally, there comes a time when there is an opportunity for somebody else who is larger or has more of an international footprint to help take it to the next level,” he said.

The deal went out to a limited number of prospective buyers, among them Compass. The buyer owns another outdoor oriented component company called BOA, which deals with footwear and other sporting brands.

“We are very pleased that we were able to find a new owner with high quality-people who are deeply experienced in the space and also have resources that we think can lead PrimaLoft to the next level.”