Gryphon sells Sheplers to Boot Barn at 147 million

Gryphon Investors, a San Francisco-based private equity firm, has just announced that it has entered into a definitive agreement with Boot Barn Holdings, Inc. (NYSE: BOOT) to sell its portfolio company Sheplers, Inc.

The transaction has been sealed at 147 million dollars in cash. In comparison, for the year ended March 28, 2015, Sheplers had net sales of approximately 157 million dollars, which included 66 million dollars of e-commerce sales, and adjusted EBITDA of 14.9 million dollars, highlighted ‘StreetInsider’.

Sheplers’ acquisition will boost Boot Barn’s market penetration

The Sheplers acquisition represents a significant step forward for Boot Barn, as it will increase Boot Barn’s e-commerce penetration from 4 percent to 15 percent.

Additionally, this acquisition is expected to generate 6 million to 8 million dollars of annual synergies and be immediately accretive to earnings, excluding estimated one-time transaction and integration expenses of 14 million dollars, and approximately 10 percent accretive post integration, which is expected to be completed in calendar year 2016, advanced the retailers in a joint statement.

“We are delighted to have executed on our original vision of building a truly premier Western lifestyle and enthusiast brand, one which has incorporated the power of e-commerce to expand beyond its traditional catalogue and bricks and mortar roots into a unique omni-channel speciality retailer. Gryphon achieved our goal of completing a sale that positions Sheplers for continued success, while also generating attractive returns for our limited partners and co investors,” said David Andrews, Gryphon’s CEO and Managing Partner.

Working with Gryphon, Sheplers brought in veteran omni-channel executive Bob Myers as CEO in early 2010.

As highlighted by the now former owner of Sheplers, Myers, COO Mark Hampton, and the rest of the senior management team, with the help of Gryphon’s financial and operational resources, opened 13 new stores, implemented a new website, developed a virtual inventory concept and focused on building a strong e-commerce business to drive the retailer’s growth.

Commenting on the deal, Dennis O’Brien, Gryphon Operating Partner added, “Gryphon’s successful investment in Sheplers underscores our commitment to building leading businesses in partnership with distinguished executives such as Bob Myers and Mark Hampton. We have greatly enjoyed working with the entire senior management team and we thank them for their leadership.”

In the same vein, Myers stressed that “Gryphon has been an exceptionally supportive partner, delivering invaluable strategic, operational and financial guidance as we have built Sheplers into a powerful domestic and international destination for all things Western. We believe Boot Barn is an excellent owner to take Sheplers to the next stage in its evolution and to an even broader range of customers.”

Lazard Middle Market LLC acted as adviser to Gryphon, and Kirkland & Ellis LLP served as company counsel on the transaction.