Dometic Group entered into an agreement on Sept. 17 to purchase the Katy-based Igloo company for $677 million, according to a Dometic press release. The new owning company said the $401 million …
Dometic Group entered into an agreement on Sept. 17 to purchase the Katy-based Igloo company for $677 million, according to a Dometic press release. The new owning company said the $401 million – a growth of 24% from the prior year – over the last 12 months should prove a healthy investment.
"I am excited to welcome Igloo and its employees to Dometic. This acquisition is in line with our strategy to position Dometic as a more consumer-driven, less cyclical company in the fast-growing outdoor business. North America is the largest market for cooling boxes and outdoor products, and with Igloo’s strong brand recognition, consumer knowledge and local manufacturing capabilities, we are getting the necessary tools to further drive our sales and margin expansion." said President and CEO of Dometic, Juan Vargues.
Igloo was founded in 1947 and is perceived as one of the leading manufacturers in the world with an iconic brand and range of insulated outdoor products. The company enjoys 92% of net sales in the U.S. and its products are available in more than 90,000 retail stores globally, according to Dometic. It also has a growing direct-to-consumer sales channel. Companywide, Igloo has about 1,100 employees and its headquarters is located in the southwest corner of Igloo Road and Highway 90, west of Katy.
Under the terms of the sale agreement, Dometic will pay the overall price of $677 million in cash without any financing. The agreement includes an earn-out element of a maximum of $233 million, the press release said. The transaction is expected to generate $150 million in annual sales for Dometic and jointly save the two companies in cost synergies of about $5 million per year. Closing is expected to take place later this year and is subject to regulatory approvals.
Igloo’s previous owner which is selling to Dometic is ACON Investments, which acquired the company in 2014. Igloo representatives said the purchase is a positive step for Igloo.
“I am extremely proud of everyone on our team who has worked so hard in building Igloo into an Iconic American Brand,” said Dave Allen, president and CEO of Igloo Products Corp. “As part of the Dometic Group, we look forward to combining our resources in order to accelerate innovation and growth across the globe.”
Vargues said the overall acquisition is a positive sign for both the parent company and its new subsidiary.
"Our strategy for profitable expansion is built on a combination of organic and acquisitive growth. This is our eighth acquisition this year and our pipeline of potential future acquisitions remains strong." Vargues said.