An Outsider’s Look at the Pure Fishing Deal

Just when you thought the Peak Rock Capital acquisition of Southern Plastics would be the biggest tackle story of the week, along comes the announcement that Newell Brands has sold Pure Fishing.

You know Pure Fishing, of course. It’s the giant corporation that owns Abu Garcia, All Star, Berkley, Chub, Fenwick, Greys, Hardy, Hodgman, Johnson, JRC, Mitchell, Penn, Pflueger, Sebile, Shakespeare, SpiderWire, Stren, Ugly Stik and some other brands I’m probably forgetting.

I doubt there’s an angler in America that doesn’t have some Pure Fishing products with him every time he wets a line … and there’s a good chance that the line he’s wetting was made by Pure Fishing.

We’ve known that Newell Brands wanted to sell Pure Fishing (and Jostens) since early May. Newell’s stock prices were falling, and it was a way to get out from under a lot of factories and a big chunk of its workforce.

And since May there have been numerous rumors floating around the industry about who would buy Pure Fishing. Recently, reports that Smith & Wesson was in the hunt were practically viral.

And, of course, every rumor came with assurances that it was absolutely, positively carved-in-stone certain to be true. Industry Insider A heard it from Industry Insider B that B’s sister played racquetball with a woman from some company that uses a law firm in the same building as another firm that handles mergers and acquisitions for Company C … and the deal was all but done.

But the rumors weren’t true. Not one of them.

Now we know that the real purchaser is Sycamore Partners out of New York.

So, who is Sycamore Partners?

According to the boilerplate of the Newell Brands press release,

Sycamore Partners is a private equity firm based in New York. The firm specializes in consumer, distribution and retail-related investments and partners with management teams to improve the operating profitability and strategic value of their business. Sycamore has approximately $10 billion in assets under management. The firm’s investment portfolio currently includes Belk, Coldwater Creek, CommerceHub, Hot Topic, MGF Sourcing, NBG Home, Staples, Inc., Staples United States Retail, Staples Canada, Talbots, The Limited and Torrid.

There’s often more in such a paragraph than you might think. Quite often the private equity (PE) firm will brag about what they think they do well. In this case, Sycamore mentions “operating profitability and strategic value.” It likely means they think they’ll bring some economy of scale, streamlining of operations or integral partnerships into the mix.

It is a lead pipe cinch they saw opportunities to improve on the way Newell Brands was handling Pure Fishing because no one buys a company unless they think they can run it better than the guy selling it.

It’s also likely that Sycamore Partners is already thinking about who might buy Pure Fishing from them in three to five years. That’s what PE firms do … no matter what else they might say. It’s how they make their money.

I think it’s fair and safe to say that the new owner of Pure Fishing will add their flavor to the mix, work to make the operation more efficient, more effective and more profitable and try to make it bigger and better for the next PE firm that wants to work its magic on sportfishing’s biggest player.

Sycamore Partners will show prospective buyers that they’ve done great things with Pure Fishing, but that there are still great opportunities ahead … and those opportunities will be right in the wheelhouse of that prospective buyer. The boilerplate of the next buyer will emphasize marketing or international sales or direct-to-consumer sales or something like that.

But that’s down the road.

For now, Sycamore Partners has just become a major player in our world.

I wish them all the best with these legendary brands.