Kinderhook agrees to sell SCA Performance for $328mn

Fox also agreed to an additional $13mn of contingent, performance-based retention incentives for key SCA management payable over two years.

Kinderhook Industries agreed to sell specialty vehicle manufacturer SCA Performance Holdings to Fox Factory Holding Corp for $328 million, exclusive of vehicle inventory. Fox also agreed to an additional $13 million of contingent, performance-based retention incentives for key SCA management payable over two years. The deal is expected to close in the first quarter of fiscal 2020.

Press Release

Kinderhook Industries, LLC (“Kinderhook”) today announced a definitive agreement to sell SCA Performance Holdings, Inc. (“SCA” or the “Company”) to Fox Factory Holding Corp. (NASDAQ: FOXF) (“FOX”) for a purchase price of $328 million, exclusive of vehicle inventory. Fox also agreed to an additional $13 million of contingent, performance-based retention incentives for key SCA management payable over the next two years. The acquisition, subject to regulatory approvals and customary closing conditions, is expected to close by late first quarter of fiscal 2020.

SCA is a leading OEM-authorized specialty vehicle manufacturer (“SVM”) for light duty trucks and SUVs with headquarters in Trussville, Alabama. The Company operates under three industry-leading, aftermarket brands: SCA Performance, Rocky Ridge Trucks, and Rocky Mountain Truckworks. The acquisition is complementary to FOX’s Tuscany business, expanding its North American, geographic manufacturing footprint and broadening its product offering in a growing segment of the automotive industry. The combination of Tuscany and SCA as part of FOX’s branded portfolio of premium products provides FOX with a leading market position. Additionally, this acquisition creates an opportunity to add FOX products, including lift kits and suspension components, to SCA’s vehicles.

“We are excited to announce the acquisition of SCA, and believe it presents a substantial opportunity for FOX to further expand its performance-defining aftermarket solutions and continue to drive growth in our Powered Vehicles Group,” stated Mike Dennison, FOX’s Chief Executive Officer. “We look forward to further accelerating our already significant presence in the growing specialty vehicle manufacturing market. We welcome the experienced SCA leadership team and believe they will play an integral part in our company’s growth going forward.”

“The entire SCA management team is thrilled to join FOX. We have tremendous admiration and respect for the FOX brand, leadership, and culture of providing customers with performance-defining products,” stated Michael McSweeney, SCA’s Chief Executive Officer. “As part of FOX we expect to build upon the success of both companies to further expand our market position and product offerings.”

Tom Tuttle, Managing Director at Kinderhook, stated, “This is an outstanding outcome for Kinderhook, SCA and its employees. The SCA team, led by Michael and Matt McSweeney, executed on an aggressive organic and acquisition-led growth strategy since Kinderhook acquired SCA in April 2018. We are very proud of the SCA team’s accomplishments and expect the Company to continue its track record of success as part of FOX. Our investment in SCA highlights the key tenets of Kinderhook’s investment strategy – partnering with world class management teams to create leading niche market companies.”

Kirkland & Ellis provided legal counsel to SCA. Jefferies served as exclusive financial advisor to FOX for this transaction and FOX received legal counsel from Squire Patton Boggs LLP.

About Kinderhook

Founded in 2003, Kinderhook Industries, LLC is a private investment firm that manages over $3.1 billion of committed capital. We have made in excess of 225 investments and follow-on acquisitions since inception. Kinderhook’s investment philosophy is predicated on matching unique, growth-oriented investment opportunities with exceptional financial expertise and our proprietary network of operating partners. Our focus is on middle market businesses with defensible niche market positioning in the healthcare services, environmental / business services, and automotive / light manufacturing sectors. We have a track record of successfully and consistently building industry leaders. For more information please visit: www.kinderhook.com.

About SCA

Founded in 1979, SCA is a leading OEM-authorized specialty vehicle manufacturer for light-duty trucks. The Company receives new vehicles directly from the OEMs, adds specialty packages and then sells the up-fitted vehicles to new truck dealers with a full OEM warranty. SCA’s vehicles are differentiated by their proprietary premium design packages, high-quality installations and OEM warranty. The Company is headquartered in Trussville, AL and also has facilities in Fort Collins, CO, and Franklin Springs, GA.

About FOX

Fox Factory Holding Corp. designs and manufactures performance-defining products primarily for bicycles, on-road and off-road vehicles and trucks, side-by-side vehicles, all-terrain vehicles, snowmobiles, specialty vehicles and applications, and motorcycles. The Company is a direct supplier to leading power vehicle OEMs. Additionally, the Company supplies top bicycle OEMs and their contract manufacturers and provides aftermarket products to retailers and distributors.