Emeram forms EUR 100m continuation fund for Boards & More

Cebile Raymond James acted as sole financial adviser to Emeram on the process for Boards & More, while Poellath provided legal advice.

The rationale behind the transaction was based on the fact that, although Boards & More was reaching the end of its investment period in Emeram Fund I, both the GP and the company's management were convinced of its potential for future growth, Sunaina Sinha Haldea, global head of private capital advisory at Cebile Raymond James, told Unquote. Consumer trends in fitness and health in the wake of the coronavirus pandemic have driven the company's growth, she added. 

A spokesperson for Emeram confirmed that the firm saw "considerable potential for growth", noting that the GP was keen to continue working with the company's existing management team.

Boards & More produces sporting goods, specialising in kitesurfing, windsurfing and stand-up paddling (SUP) equipment. It also provides products for cycling, including clothing, bike protection and aftermarket bike equipment. The company was formed in 2000 via the merger of the F2, Fanatic and Mistral brands. Its core brands are now Fanatic, ION and Duotone.

During Emeram's investment period, Boards & More has quadrupled its revenues and has almost doubled its workforce to 180 staff, according to a statement. The company posted 2020 revenues of EUR 87m, according to its website. Headquartered in Rabach, it operates in Europe as well as the US and Brazil.

Emeram acquired Boards & More in 2013 in a EUR 39m deal via Emeram Fund I, which held a final close in January 2015 on EUR 400m. The deal was the first to be made from the vehicle, according to Unquote Data.

LPs in Emeram Fund I include DB Private Equity, SwanCap Partners, Finnish public pension fund Merimies Eläkekassa, and Reflex Winkelmann, according to Unquote Data.

The GP raised a further EUR 50m in primary capital for the fund in April 2019 via a GP-led process, with the additional capital intended to fund bolt-ons for the portfolio, as reported. This transaction was backed by new investors including Arcano Capital, Schroders, Unigestion and Lombard.

All of the investors in the new continuation vehicle for Boards & More are existing LPs, other than Coller Capital, which led the deal and was advised by Akin Gump and Flick Gocke Schaumburg. The Emeram team have also rolled over their commitments, a spokesperson for the GP told Unquote.

According to Unquote sister publication Debtwire, the company underwent a dividend recap in 2018, at which time it posted adjusted EBITDA of EUR 10m and revenues of EUR 71m. Apera provided a unitranche facility, with Berenberg providing a revolving credit facility.

In March 2021, the company took on further debt financing to acquire cycling equipment specialist SQlab, also backed by Apera and Berenberg, according to Debtwire. However, the new GP-led deal has not led to a change in the financing of the company.

The fresh capital is intended to support Boards & More's development, which is expected to include investments in organic growth, as well as add-ons. The company's add-on pipeline is focused on growing brands with "outstanding product competence" within the outdoor action sport sector, the same spokesperson for Emeram told Unquote.

Founded in 2012, Emeram currently has six companies in its portfolio and focuses on mid-market companies in the DACH region, focusing on the consumer, technology, software, and services sectors.

The GP joins several of its market peers in setting up continuation funds. Capiton established a single-asset continuation vehicle for omega-3 food and pharmaceutical supplements producer KD Pharma in 2019, setting up a top-up vehicle in July 2021, as reported.

In Switzerland, Ufenau Capital Partners – which invests in small-cap asset-light businesses and follows a buy-and-build strategy – registered in November 2021 its third continuation fund, as reported. The fund is expected to house two or three assets from its 2014-vintage Ufenau IV German Asset Light fund, although Ufenau declined to comment at the time. Swiss market peer Capvis announced its first ever continuation vehicle in August 2021, raising EUR 230m for the three remaining assets in its 2008-vintage Capvis Equity III fund, as reported.

The prevalence of GP-led secondaries in the European mid-market has grown significantly in the past year, according to Cebile Raymond James's Sinha Haldea. "While continuation vehicles of two years ago were taken up by upper-mid-market, large-cap and mega-caps, 2021 has seen the start of a trend," she told Unquote. "We are in the early innings of this, but mid-market GPs are seeing that they can use the tool effectively for a win-win-win solution for the GP, LPs and management. Mid-market GPs can do this just as effectively. Why should they not do the same? It's the start of a very dynamic option for mid-market and lower-mid-market GPs, instead of selling to a strategic or sponsor."

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• Secondaries
• DACH
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• Coller Capital