Mad Engine, which is backed by Platinum Equity, has agreed to acquire a controlling stake in Northern California-based Fifth Sun, a maker of graphic apparel for the retail clothing industry. The seller was Fifth Sun founder Dan Gonzales. No financial terms were disclosed. The deal is expected to close during the second quarter of this year.
LOS ANGELES (May 20, 2021) – Platinum Equity announced today the signing of a definitive agreement to acquire a controlling stake in Fifth Sun from company founder Dan Gonzales. The acquisition will be made through Platinum Equity portfolio company Mad Engine.
The transaction is expected to be completed during the second quarter of 2021. Financial terms were not disclosed.
Fifth Sun is a leading designer, distributor, and technology-driven innovator of print-on-demand manufacturing and supply chain systems for a wide range of licensed, generic, and private label graphic apparel. Mad Engine, acquired by Platinum Equity in December 2020, is a full-service, global apparel and accessories company that creates, designs, produces and distributes a full range of licensed, private label and branded products.
“As the eCommerce channel for apparel and accessories continues to grow, demand for digital solutions like direct-to-garment and print-on-demand is accelerating,” said Platinum Equity Partner Jacob Kotzubei. “Bringing these two companies together will not only better meet the changing needs of licensors and customers, it will also help both businesses diversify and capture opportunities in this substantial emerging market.”
Mad Engine CEO Danish Gajiani said the companies are a great fit and the combination will be transformational.
“Our partnership with Platinum has allowed us to pursue tremendous growth in a short period of time and Fifth Sun represents a unique opportunity to continue along that path. As the premier technology-driven solutions provider in our space, we believe Dan and the team at Fifth Sun have built an extraordinary business with an impressive culture, and we look forward to working together,” said Mr. Gajiani. “Integrating their capabilities in technology, global supply chain, infrastructure, design, and performance track record into Mad Engine will make us even more competitive on a global scale.”
Mr. Gonzales, who founded Fifth Sun in 1994, will have a meaningful equity interest in the combined company and will stay on as a senior strategy advisor.
“I’m excited to work with the Platinum and Mad Engine teams on the next phase of growth and evolution for our company,” said Mr. Gonzales. “Joining forces will help diversify our product mix, grow our license portfolio, and capitalize our company to take advantage of the multitude of opportunities that the Fifth Sun engine was built for. Danish and I are excited to bring together two best-of-class companies with great synergies and growth opportunity for our employees. I am proud of the Fifth Sun team and it is deserving of this opportunity.”
Fifth Sun also announced today its expansion into a new state-of-the-art digital production and fulfillment center in Hebron, KY to meet strong demand from its eCommerce customers and license partners. In total, Fifth Sun expects to double its apparel print-on-demand capacity in 2021 to 18.5 million unique items on an annual basis with plans to add additional capacity in 2022. The company also plans to launch print-on-demand drinkware and other products in 2021.
Gibson, Dunn & Crutcher LLP and Alston & Bird LLP are serving as Platinum Equity’s legal counsel on the acquisition of Fifth Sun. Lincoln International is serving as financial advisor to Platinum Equity on the transaction.
CriticalPoint Partners is serving as financial advisor and Buchalter is providing legal counsel to Fifth Sun. Deutsche Bank, Wells Fargo Capital Finance, and Credit Suisse are providing financing for the transaction.
About Platinum Equity
Founded in 1995 by Tom Gores, Platinum Equity is a global investment firm with more than $25 billion of assets under management and a portfolio of approximately 40 operating companies that serve customers around the world. The firm is currently investing from Platinum Equity Capital Partners V, a $10 billion global buyout fund, and Platinum Equity Small Cap Fund, a $1.5 billion buyout fund focused on investment opportunities in the lower middle market. Platinum Equity specializes in mergers, acquisitions, and operations – a trademarked strategy it calls M&A&O® – acquiring and operating companies in a broad range of business markets, including manufacturing, distribution, transportation and logistics, equipment rental, metals services, media and entertainment, technology, telecommunications and other industries. Over the past 25 years Platinum Equity has completed more than 300 acquisitions.
About Fifth Sun
Located in Northern California, Fifth Sun is a leading manufacturer and distributor of graphic apparel for the retail clothing industry for over 27 years. It is internationally recognized as being a progressive and creative supplier of on-trend apparel in the online market and retail industry. Fifth Sun prides itself on their proprietary software and networking systems which drive a sophisticated Print-on-Demand supply chain for ecommerce in the B2B and B2C markets that is not just limited to apparel. The company offers a diverse and unique portfolio of licensed, branded, and private label products to both online and brick and mortar, premium specialty stores, mid-tier and mass retailer partners.
About Mad Engine
Founded in 1987, Mad Engine has grown to become a leading global wholesaler of licensed, branded and private label apparel and accessories. Top licenses include Marvel, Star Wars, Disney, Fortnite, Netflix and Nickelodeon. Company-owned brands include Lifted Research Group (LRG), Neff Headwear and Mighty Fine. Mad Engine’s footprint spans multiple continents, with unique locations dedicated to customer service, manufacturing, quality assurance and distribution. This process better enables the company to fully meet the needs of every customer – from independent boutiques to mass market retailers – ensuring the best customer experience possible.