MUSKEGON — A West Michigan manufacturer of kayaks, paddleboards and other watercraft has sold to a Florida-based private equity firm.
New Water Capital LP of Boca Raton, Fla. purchased Muskegon-based KL Outdoor LLC in a deal that closed at the end of 2016.
The transaction occurred after an unnamed Detroit-based investor group decided to sell its stake in KL Outdoor, the maker of Sun Dolphin and Evoke brands of watercraft, said Chas Chandler, managing partner at Birmingham-based Amherst Partners LLC.
Chandler and Amherst Partners served as the financial adviser to KL Outdoor, which rebranded from Ameriform Inc. in 2016 in a bid to attract more attention to its key brands.
“There’s always a period of time where people need to harvest their investment,” Chandler said of the investor’s decision to sell. “The timing seemed to be right because the future of the company looked very bright. Those investors said we want to transition the ownership to a new group when things look really rosy, and 2017 is going to be another great year for the company.”
For KL Outdoor, the transaction provided a needed influx of capital so it could meet customer demands for its products, which also include plastic thermoformed sleds, hunting blinds and portable outhouses.
“Since 2010, we’ve been growing at about a 20-percent clip or better,” said Dan Harris, vice president of sales, who declined to disclose annual sales for KL Outdoor. “We got to a point where we needed more financing to help continue to grow. These guys will help us grow through property and equipment and maybe strategic acquisitions. We’ve really had our hands tied with sales.”
Terms of the deal were not disclosed.
KL Outdoor will maintain its manufacturing facility in Muskegon, and the executive team will remain with the company following the sale. The company employs 500 people throughout its operation.
For the buyers, the transaction marked an opportunity to invest in a healthy, growing company, said Chandler of Amherst Partners.
Going forward, the company plans develop new kayaks and other product lines in the outdoor and recreation industry, Harris said.
The company has grown its kayak business significantly over the years. The company produced 600,000 kayaks in 2016, compared to the 28,000 kayaks it made in 2010, Chandler said.
KL Outdoor has increased its footprint in recent years, including a lease it signed in November 2016 for 70,000-square-foot in a facility Robert Grooters Development Co. is building in Norton Shores.
The company also invested $7.5 million in new equipment and leased a 130,000-square-foot facility in 2014 to better accommodate orders from big-box retailers such as Dunham’s Sports, according to a previous MiBiz report.
New Water Capital did not respond to requests for comment at the time this report was published.