Paintball Mergers and Acquisitions

[Robbo]

I would agree with most of what you write Nick and I have no problem in deferring to your greater business knowledge (I have little) but I would tend to disagree with you stating there isn't a 'trend'.
K2's acquisition of JT, VL and Worrgames might well have been seen as a product / brand expansion but when you line it up alongside the takeovers of ProCaps, NPS/ PMI and Tippmann, it's kinda hard to resist the notion of a trend developing here where you have something like 80% of the market being tagged by investment houses.

Whilst Dye and SP aren't exactly vulnerable at the moment because of their brand status within the marketplace, it ain't gonna take long for the big boys to switch their attention sideways and start sniffing out the larger margin product base.
When the giants awake from their slumber, and with supply lines already established in Asia, they are gonna go for the likes of Dye and SP, make no mistake about that mate.

 

[jamtheman188]

Investment companies to take over smaller paintball companys is an excellent thing, i think there is deffinately a trend developing as this is happening more and more. And I wouldnt use phrase venture capatalists as they tend to be sole entrepreneurs buying a stake in a business, as opposed to a company.
The businesses will still have the same staff and managers, so there will still be the same way of doing things but we will all reep the advantages of the economies of scale that a large company will bring. That means cheaper stuff for us, and a more reliable service.
As far as i am aware PMI and NPS where making a loss? I might be wrong, but that would have been a large factor in those companies seeking the help from an investment firm.

 

[DeepPyro]

I don't really think the privately owned companies like Planet/Dye have much to worry about, they have a passion for the game that shows in the quality of products.

Look what K2 have done to WGP, there has been a decline in the quality (Worrframe anyone?) and the they seem to be trying to move away from the cocker market (Worrmachine? what a piece of sh!te)

I know cockers have moved out of fashion but you used to be able to make a completely custom one, now with planet has stopped production I see them finally fading out and being replaced by cheap imitations cashing in on the trade name.

DP

 

[JPB]

A little business 101

I normally do not post on these forums but this one is a little interesting. Allow me to point out a few key factors.
1- All of the outside investment companies are simply looking for either a short or long term cash out of the deal. Depending on industries as well as the products in that industry will determine the short or long objective of the company. Whether it is a technology driven industry, an every day home related industry such as food, cosmetics etc. 97% of the time these investment companies are looking at one very important aspect. How fast we can either rebuild and/or create fast growth with market share within an industry. They either want to take the company public ( that is their profit center and pay off) or take a company and break it into many pieces and sell it off. This creates a greater return by breaking the company down and selling off it most viable assets and/or divisions at a strong return and then selling off the what is left for pennies on the dollar. This too in most cases creates a strong ROI for the investment group.
Investment companies will also look at merging companies together to create synergies and have a well rounded company that can better compete in the marketplace and also use their existing strengths and take it to help leverage their position in an existing account or new accounts. This one directly applies to K2 because this allowed to simply expand their business, shelf space and overall corperate program to the Wal-Marts and other large retail customers. This is suppose help the stock price which for public companies is what it is all about. But with them it hurt their stock price due to mis management and bad decisions by management on the paintball business. That is why you keep seeing them making changes and why they hired Chuck.
The buyout of NPS and PMI was simply a pennies on the dollar deal. They both were on the verge of collapse for different reasons. The only way to make it some what viable was to merge both and use each one's strength to help offset the others weakness. Question is can they put Humpdy Dumpy back together again. That will get much worse before it get's better. There are no promises it will get better.

Both Tippmann and Procaps were a more long term plan where they are looking to build these companies up through expanded product offering, buying our smaller companies etc. Both of their plans are to sell it or take it public if the market will accept a paintball company as a vialbe entity. There is much more but this is getting to long.
Remember these companies buy and sell companies every day. They have no love and it is all about the return on the dollar.
We can get into Dye and Smart Parts another day
JPB

 

[Robbo]

JPB, well you haven't really told me (or anybody else) anything new in any of that; we got a quick business 101 exercise and then a trawl through the recent acquisitions that hasn't really added anything but I am interested to know what you think of Dye and SP.
I would like to know your opinion of the following :-

a) Why you think these two companies in particular have done so well?

b) Do you think these two companies would resist a buy out, and if so, why?

c) Do you think it a co-incidence that two of the most successful companies (both privately owned) have individuals who not only own the companies but all 3 of them (Dave Youngblood, Billy And Adam Gardner) are probably the most influential individuals in the leagues and therefore within the sport?

 

[RainbowShooter]

If i had a sig, that post would go in it

Done

 

[Robbo]

Done

I'm flattered but maybe it needs the context of the post I was referring to make any sense of it and therefore reveal its true genius

 

[Raffles]

Yeah - you need to make me look a fool (something I usually manage myself).

 

[RainbowShooter]

Shant! well not untill I get my trigger anyway

Edit: How this

 

[Raffles]

Woohoo - I'm nearly as famous as Mikey now .