Hydro Flask, the Bend-based maker of stainless steel, vacuum-insulated bottles first sold at Munch and Music and the Deschutes County Fair, has been acquired for approximately $210 million by a subsidiary of Helen of Troy Limited, a global consumer products company based in El Paso, Texas, the companies announced Monday.
Hydro Flask, which is building a new corporate headquarters in NorthWest Crossing, will remain in Bend, according to the announcement. All 52 employees will remain on board, and Hydro Flask leadership will remain intact, said Lucas Alberg, Hydro Flask public relations manager.
In a news release, Hydro Flask CEO and president Scott Allan said, “This offers us an incredible opportunity for continued growth and industry leadership thanks to the efficiencies and global leadership provided by Helen of Troy.”
Helen of Troy’s portfolio includes familiar brands such as Vitalis and Brut, Revlon and Braun. It also owns Pur water filters and filtration systems and Oxo, a maker of consumer products.
“The Hydro Flask acquisition is an excellent fit with Helen of Troy’s strategic goal of investing its strong cash flow in businesses that can accelerate its profitable growth in categories where it can add value,” a Helen of Troy news release stated. The company reported total revenue of $1.44 billion with $1.32 billion in expenses in 2015. It expects net sales revenue from Hydro Flask of $65 million to $70 million this year, an increase of $11 million to $16 million, according to the Helen of Troy news release.
Alberg said Hydro Flask recently set up an office in Basel, Switzerland, to handle sales in Europe, where its products are available in Switzerland, Belgium, the Netherlands, the United Kingdom, Sweden and Germany. Hydro Flask started shipping products to Europe in the summer, he said.
Hydro Flask in September turned to a Wisconsin investment firm, Robert W. Baird Co. Inc., to find a buyer, Alberg said. He said the company attracted numerous suitors.
“There was a lot of interest in acquiring Hydro Flask, but we really wanted to maintain our brand and our company values and wanted to keep going with what brought us here,” Alberg said, “so those were the major factors for us in deciding who to partner with.”
The sales price, nearly four times Hydro Flask revenues, reflects its growth potential, said Stephanie Wissink, an analyst with Piper Jaffray , an investment and financial management firm in Minneapolis. Hydro Flask revenues in 2015 went from about $30 million to $54 million, she said.
Helen of Troy, whose name reflects the company’s beginnings in personal beauty products, will provide capital to help Hydro Flask grow, expertise to expand its distribution and a backstop in terms of managing its growth. Wissink said her firm issued a buy recommendation for Helen of Troy stock in September 2014, when it traded at about $55 a share. The company’s share price since then has nearly doubled; it traded at $95.36 after-hours Monday on the Nasdaq.
“What Helen will also provide is somewhat of a safety net,” Wissink said. “There are so many growing pains going from a $50 million company to a $100 million company, from supply-chain management to human capital management. And now there’s an entity that can provide those assets.”
Hydro Flask will come under the Oxo subsidiary, Wissink said. Oxo, acquired by Helen of Troy in 2004 and based in New York City, is a design-oriented consumer products firm that makes a variety of more expensive products from kitchen utensils to barware to storage containers.
“The company (Helen of Troy) is looking to augment its own organic growth by buying into higher-growth categories,” and that means premium products like Hydro Flask, she said.
Hydro Flask is No. 2 in sales of hydration bottles to outdoor and fitness consumers, Helen of Troy CEO Julien Mininberg said in a news release.
“They have built a strong foundation for future growth, and we think it is a great fit for our housewares segment and our company,” Mininberg said during an investors’ conference call Monday.
Hydro Flask, named one of the 500 fastest-growing private companies in 2015 by Inc. magazine, started nearly seven years ago under Travis Rosbach, who sold his bottles out of a pickup truck at farmers markets in Portland and at the Deschutes County Fair, Alberg said. He said Rosbach sold the company in 2012 to Jim Collis and other investors. Allan came aboard as an investor and CEO in June 2012, Alberg said.
“Thermal bottles were just associated with large, bulky coffee Thermoses” that workers carried to their job sites, he said. Rosbach created a lighter, aesthetically pleasing bottle made of stainless steel that kept cold beverages cold and hot beverages hot, Alberg said.
Rosbach and former business partner Cindy Morse also introduced Hydro Flask bottles around the time concerns were growing about the use of chemicals, such as bisphenol A, in plastic water bottles.
Rosbach could not be reached for comment. On his Linkedin page, Rosbach wrote that people “were amazed after sipping ice-cold water from their Hydro Flask after it sat in a blazing hot car for hours and equally impressed after snowshoeing up a mountain and still being able to enjoy piping hot coffee at the summit.”
The company and its employees have received several awards over the years, including an industrial design award in a worldwide competition, and Allan, its CEO, received the EY Entrepreneur of the Year 2015 in the retail and consumer products category in the Pacific Northwest region.
More than 20,000 retailers carry Hydro Flask products today, he wrote, including many outdoor-gear and sporting goods stores and breweries.
“It started as a very scrappy startup without any capital whatsoever,” Alberg said.
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