PrimaLoft will become its own independent company as its parent firm Albany International has agreed to sell the insulation brand for $38 million to its current management team in partnership with Prudential Capital Partners.
Michael Joyce, the former president of Albany International’s Applied Technology Group, will lead the new PrimaLoft Inc. as president and CEO. Prudential Capital Partners provided funding for the deal.
PrimaLoft is one of the outdoor industry’s leading providers of synthetic insulation for products such as sleeping bags, jackets, and winter accessories.
The company employs about 20 people at its offices in Albany, New York and another 20 people overseas with offices in Ballo, Italy and Munich, Germany. PrimaLoft will remain headquartered within Albany International’s offices for the near term, officials say. All employees are remaining with the company.
“This move will enable PrimaLoft to continue to grow by making the necessary investments in the brand to maintain its leadership position in the marketplace, ” Joyce said. By becoming an independent, privately held company, PrimaLoft will have more control to reinvest its profits and resources into the brand, officials say.
“Long term, our brand partners will benefit from streamlined and improved customer service, accelerated development of new and highly innovative products, and further strengthening of the PrimaLoft brand,” said Joe Rumiesz, vice president and general manager of PrimaLoft.
Albany International, which is a public company (NYSE: ABI), has reported strong financial results for its PrimaLoft business in the previous two quarters, including a 47 percent jump in PrimaLoft sales to more than $5.2 million in the fourth quarter 2011, compared to a year ago, and a 25 percent rise in sales to nearly $8.5 million in the first quarter 2012. Quarterly operating profits for Primaloft came in at $2.23 million in the fourth quarter, and $1.55 million in the first quarter.
Those positive figures might seem contrary to expectations from an insulation brand after one of the warmest winters in U.S. history, but officials say PrimaLoft was able to benefit from a cold snap in Europe, plus retailers placing orders earlier than the previous year, well before the weak winter presented itself.
That pull forward in sales last year could mean a rough start for PrimaLoft this next winter (with retailers and brands having plenty of leftover inventory), possibly playing a factor in the timing of the Albany sale. Still, the new owners clearly see long-term potential for PrimaLoft, and as an independent company with new investment, the industry can expect to see more innovation ahead.
The sale is the second in the outdoor industry this week. On Tuesday, Wolverine Worldwide (parent to Merrell and Chaco footwear brands) announced it would buy the Saucony, Sperry Top-Sider, Stride Rite and Keds shoe brands for $1.23 billion.