home furnishing demand rises amid pandemic...the furniture & home furnishing subsegment has...
TRANSCRIPT
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3
December 2020
KEY HIGHLIGHTS
• The Home Goods industry suffered from early
headwinds but has bounced back strong
• Digital companies have demonstrated the most
resilience amid the pandemic
• M&A activity has slowed but strategic buyers
remain active
• Capstone expects M&A activity to increase in 2021,
presenting a favorable opportunity for home
goods providers to come to market as strategics
look to bolster offerings and private equity buyers
seek to build out their sector portfolios
HOME FURNISHING DEMAND RISES AMID PANDEMIC
HOME GOODS UPDATE | DECEMBER 2020
CONTACTS
Lisa Tolliver
Senior Director
Kenneth Wasik
Managing Director,
Head of Consumer & Retail
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CONTACTS
Lisa Tolliver
Senior Director
773-791-9493
Kenneth Wasik
Managing Director,
Head of Consumer & Retail
917-434-6124
Following substantial headwinds during the onset of the pandemic, the Home
Goods industry has demonstrated a remarkable recovery driven by consumers’
heightened focus on home furnishings and improvement amid increased time
at home. Quarantine restrictions and work from home trends are fueling
home goods spending and investors are showing increased attraction to the
sector. Capstone expects merger and acquisition (M&A) activity to accelerate
for quality home goods companies with established online channels, strong
brand recognition, and differentiated business models. Strategic buyers
remain active and private equity firms are shifting from crisis management of
portfolio companies to actively pursuing platform and add-on investments.
The acceleration of e-commerce adoption has been apparent, evidenced by
leading online home furnishings retailer Wayfair’s (NYSE:W) 83.7% year-over-
year (YOY) revenue increase,1 and kitchenware provider Williams-Sonoma’s
(NYSE:WSM) Q2 e-commerce sales accounting for nearly 76% of total
revenues.2 In addition, Casper (NYSE:CSPR), which leverages retail
partnerships with Costco (Nasdaq:COST), Target (NYSE:TGT), and Amazon
(Nasdaq:AMZN), was able to drive strong sales gains in Q2, with revenue from
retail partnerships increasing 61% from the prior year, according to its
earnings release.3
Public companies in the Home Goods industry experienced significant stock
performance declines in the first half of the year but have recovered to
produce positive returns in recent months. Home goods retailers have led all
subsegments, (+64.7%) while lawn & garden (+37.2%) public companies have
emerged as a bright spot and shown resilience throughout the pandemic.
TABLE OF CONTENTS
Industry Outlook
COVID-19 Impacts
M&A Overview
Notable Transactions
Select Transactions
Public Company Data
Key Takeaways
Firm Track Record
INDUSTRY OUTLOOK
2
Home Goods
Home Furnishing Demand Rises Amid Pandemic
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Capstone Public Company Index Returns
Note: List of companies on pages 7-8
Source: Capital IQ and Capstone Research
-100%
-50%
0%
50%
100%
Dec-19 Feb-20 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20
Furniture & Home Furnishing Household Products
Lawn & Garden Home Goods Retailers
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COVID-19 IMPACTS: MATTRESS & BEDDING
3
COVID-19 severely challenged the retail environment in
the first half of 2020 with sales falling nearly 15% (Census
Bureau4) at peak disruption in April. In addition, Home
Goods providers concentrated in physical retail stores
experienced substantial headwinds, evidenced by the
bankruptcies of Pier 1 Imports, Art Van Furniture, and Sur
La Table. However, with consumers spending an increasing
amount of time in their homes and prioritizing home
improvement and furnishing, industry demand has
rebounded significantly. While in-store retailers have
struggled with closures and social distancing protocols,
digitally native brands and direct-to-consumer providers
with differentiated products and resilient supply chains
have experienced heightened sales growth.
Mattress and bedding providers have experienced strong
demand in recent months, especially those that have
invested in online channels and brand development.
Following significant disruption at the onset of the
pandemic, the sector has rebounded immensely, with
Capstone’s Mattress & Bedding public company index
returning nearly 19% as of October 19th, outpacing the
S&P 500. Notably, online mattress provider Purple
Innovation (Nasdaq:PRPL) recorded a 60.3% YOY revenue
increase in Q2, with direct-to-consumer revenue rising
127.9%, according to its earnings release.5 In addition,
Casper experienced a 15.7% YOY revenue increase, despite
recording modest sales in its retail stores, highlighting the
effectiveness of robust e-commerce channels.
Comprehensive digital capabilities have proved to be
critical to operational resilience and industry participants
are increasingly leveraging data and media solutions to
bolster digital traffic. Notably, home goods & décor e-
commerce sales increased 88% YOY in September,
according to Signifyd.6 Leading mattress provider, Sleep
Number (Nasdaq:SNBR) has accelerated its digital
capabilities in the wake of the pandemic, with digital traffic
already surpassing 2019 totals in Q3, according to its most
recent earnings call.7 It has utilized automation, machine
learning, and proprietary data to increase conversion of
elevated consumer demand. “Consumers are prioritizing
Lisa Tolliver, Senior Director
“With an active client in the Soft Home Goods sector, we are front and center regardingdiscussions with leading industry players and private equity groups interested in this growingsector. The Home Goods industry is experiencing strong momentum, particularly for businessesselling via online channels, whether through their own websites or major etailers such asAmazon, Wayfair, Target.com, etc. Consumers are shopping online and keenly focused onnesting and making their homes more comfortable, trends that are expected to continue long-term post pandemic.”
Home Goods | December 2020
their home as well as their own well-being. They
understand the strong connection between sleep and
overall health and wellness. Consumers are also adapting
digital products and service at a much faster and higher
rate,” commented Shelly Ibach, Sleep Number CEO,
President & Executive Director.
While the Mattress & Bedding subsegment has
experienced heightened demand, capacity constraints
have challenged top providers. Tempur Sealy (NYSE:TPX)
which combated significant supply chain issues through
Q2, especially in its U.S. Sealy products, struggled to meet
demand and experienced a YOY revenue decline of nearly
8%, according to its earnings release.8 However,
improving order trends on its U.S. Tempur-Pedic products
have led to optimism for Q3 sales growth, which the
company expects to increase over 30% from the prior
year, according to a press release.9 In addition, despite
Purple Innovation’s strong Q2 performance, many orders
placed in Q2 were not recognized as quarterly revenue
due to capacity limitations and an extensive backlog.
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
Oct-19 Dec-19 Feb-20 Apr-20 Jun-20 Aug-20 Oct-20
Mattress & Bedding Index S&P 500
Mattress & Bedding Performance
Note: Index includes SNBR, CSPR, PRPL, TPX
Source: Capital IQ and Capstone Research
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M&A OVERVIEW
M&A activity through year-to-date (YTD) 2020 has trailed
2019 transaction volume by 32% as many strategics
paused acquisitions and private equity focused on the
health of existing investments. However, volume has
surged in YTD Q4 with 22 deals announced or completed,
increasing 175% from the prior quarter and slightly
outpacing YOY levels. In addition, total disclosed deal
value has amounted to over $1.6 billion, modestly
exceeding 2019 YTD totals. The resurgence in transaction
volume follows two quarters of depressed deal activity,
with Q2 and Q3 recording YOY declines of 43% and 72%,
respectively. The significant increase in M&A interest
through YTD Q4 supports robust optimism for the Home
Goods sector as buyers leverage greater financial visibility
to reengage in inorganic growth strategies.
The Furniture & Home Furnishing subsegment has
comprised the largest percentage of transactions with 28
deals, followed by Lawn & Garden with 11 transactions.
Top lawn & garden players have showcased robust
performance, benefiting from at-home trends. Notably,
Scotts Miracle-Gro (NYSE:SMG) recorded a 27.5% YOY
increase in Q2 revenue and cited increased prospective
M&A opportunities in recent months, according to its
earnings call.10 Most recently, Scotts acquired a 19.5%
stake in AeroGrow International (OTCPK:AERO) for $20.1
million in October. While public companies have not
been active acquirers through YTD 2020, accounting for
only 9% of transactions, they have utilized M&A to divest
non-core businesses in order to improve liquidity and
narrow product focus. Notably, Bed Bath & Beyond
(Nasdaq:BBBY) sold three businesses in the Home Goods
sector this year, most recently selling Christmas Tree
Shops to Handil Holdings (see next page). The sale
follows
4
Lisa Tolliver, Senior Director
“Overall M&A activity has been down compared to last year due to the pandemic. However,there are some bright pockets of strong M&A activity for businesses that are benefitting from thesurge in demand in online shopping and changing consumer behaviors. Strategics have beenactive, accounting for nearly 70% of transactions year-to-date. However, we are seeing stronginterest from private equity groups focused on the long-term outlook of the Home Goods sectorand searching for opportunities to build a home goods focused portfolio. In particular, we areseeing renewed interest in sectors such as Furniture, Home Office Furnishings, Bedding, Bath andKitchen items, Garden and Outdoor decor, in addition to gift related decor and accessories.”
Nu
mb
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of
Tra
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M&A Transaction Volume
follows the divestitures of e-commerce home furnishing
provider One Kings Lane (April, undisclosed) and
PersonalizationMall (February, $252 million), an online gift
and home products company.
Private equity has demonstrated robust appetite in the
Home Goods sector through the pandemic, accounting
for 30% of total deals, slightly above 2019 levels. PE firms
have largely acted through add-on acquisitions to bolster
and diversify existing portfolio companies, which
comprised nearly 18% of total transactions in the YTD.
This has been evidenced by HCI Equity Partners-backed
Wellborn Forests acquisition of De Pere Cabinet
(September, undisclosed), a provider of semi-custom
kitchen cabinets primarily for single-family residences.
Capstone expects continued private equity interest in
2021 for targets demonstrating robust growth.
Note: Year-to-date ended December 4
Source: Capital IQ, FactSet, PitchBook, and Capstone Research
Home Goods | December 2020
26
21
29
2124
128
22
0
10
20
30
40
50
Q1 Q2 Q3 YTD Q4
2019 2020
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NOTABLE TRANSACTIONS
5
Acquires
Handil Holdings has acquired Christmas Tree Shops from Bed Bath & Beyond (Nasdaq:BBBY), a retailer
of bed & bath, furniture, home décor, kitchen & dining, food & drink, and outdoor & garden products.
Terms of the transaction were not disclosed. Christmas Tree Shops generated approximately $400
million in revenues in 2019, according to UBS.12 The transaction highlights a broader restructuring of
Bed Bath & Beyond as it focuses on its core competencies and bolstering its supply chain and
merchandising operations to improve its strategic portfolio focus on the Home, Baby, Beauty, and
Wellness markets.
“Today’s announcement builds on the purposeful steps we have made throughout the year to simplify
our portfolio, unlock capital and create clear strategic focus to accelerate our plans to build our
authority in the Home, Baby, Beauty and Wellness markets,” said Mark Tritton, Bed Bath & Beyond’s
President and CEO in a press release.13
Handil Holdings, LLC acquires Christmas Tree Shops, Inc.
(October 2020, Undisclosed)
Home Goods | December 2020
Handil Holdings
Acquires
Brand Velocity Partners (BVP) has acquired leading e-commerce provider of high-end barbeque grills,
outdoor kitchen products, and grilling accessories BBQGuys for an enterprise value of approximately
$140 million. Included in the transaction is affiliated company Blaze Outdoor Products, which provides
barbeque products and accessories. BBQGuys has leveraged rapid order fulfillment capabilities, a
comprehensive e-commerce platform, and scaled infrastructure to deliver 27% annual growth over the
past 15 years, according to a press release.14 Blaze Outdoor Products has also recorded strong sales
penetration over the last seven years, averaging 50% annual growth over the period.
"BBQGuys has an entrenched and scalable position in this large, fragmented, growing market," said
Steve Lebowitz BVP Co-Founder and Managing Partner, in the press release. "The backyard is the new
vacation spot. With the company's market expected to grow from $9.7 billion in 2019 to over $11.7
billion by 2024, BBQGuys will benefit from a strong demand profile and secular tailwinds. We're excited
to partner with such a talented management team to build the brand."
Brand Velocity Partners acquires BBQGuys
(September 2020, $140 Million)
HNI Corporation (NYSE:HNI), a premier office furniture and hearth product manufacturer, has agreed to
acquire leading e-commerce distributor of high-design furniture and accessories for office and home
settings, Design Public Group. Terms of the transaction were not disclosed. The acquisition includes
Design Public’s two e-commerce platforms – Design Public and Danish Design Store. The transaction
highlights investor appetite for online home goods providers serving attractive end markets, including
home office and furniture. The addition of Design Public bolsters HNI’s workplace furnishings and
residential building products offerings and expands its customer network.
“This acquisition aligns nicely with our long-term strategies. Design Public is a digitally native company
bringing skills and capabilities to help us accelerate our digital and e-commerce initiatives. In addition
to supporting our traditional distribution models, we will also increase our reach to a broader consumer
group that increasingly buys furniture online,” commented Jeff Lorenger, Chairman, President and Chief
Executive Officer of HNI Corporation in a press release.11
HNI Corporation to acquire Design Public LLC
(December 2020, Undisclosed)
Several notable transactions have been announced or completed in the industry in 2020. Select transactions are outlined below,
followed by a more comprehensive list.
To Acquire
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Enterprise
Date Target Acquirer Target Business Description Value (mm)
12/01/20 Design Public HNI (NYSE:HNI)Offers furniture and accessories for home and office settings
through its e-commerce platform.-
12/01/20 Jalan Jalan WelconManufactures furniture products including beds, seating, tables, and outdoor furniture.
-
11/02/20 Yeleko GrowGeneration Operates a chain of hydroponic garden centers. $32.0
10/28/20 Custom Personalization LiveXLive (Nasdaq:LIVX)Provides personalized home goods, apparel, and handcrafted jewelry online.
$6.0
10/14/20Old Brick Furniture and
MattressBennington Furniture Offers home and mattress products. -
10/13/20Christmas Tree
Shops
Handil
Holdings
Operates a chain of gift stores providing home décor, furniture,
kitchen & dining, and outdoor products.-
10/13/20D.William Garden
CenterGroupe Richer
Distributes sods, paving stones, slabs, and garden maintenance products.
-
10/12/20 Hydroponics DepotGrowGeneration
(Nasdaq:GRWG)Provides indoor and outdoor gardening equipment and supplies. -
10/08/20 American Bath Group Centerbridge Partners Manufactures bathing products. -
10/07/20Keystone
CollectionsWyrmwood Provides custom furniture products. -
09/29/20 BBQGuys/Blaze Outdoor Brand Velocity Partners Offers grills, outdoor products, and accessories. ~$140.0
09/16/20 De Pere Cabinet Wellborn Forest Manufactures semi-custom wood cabinets. -
09/02/20Kyle’s Custom Wood
Shop1847 Cabinet
Designs, builds, and installs custom cabinetry for contractors and homeowners.
$8.4
07/07/20 Mend Sleep Idle Group Manufactures mattresses. -
07/02/20 Cuisirama Les Ateliers Jacob Provides kitchen furniture products and accessories. -
06/26/20Malchow’s Home
FurnishingsMontgomery’s
Offers furniture, lighting, mattress and bedding, and flooring & window products.
-
06/22/20 ProLawn Turf ProGreen Designs and installs residential and commercial synthetic grass. -
05/07/20 Garden WeaselGeneral Tools &
InstrumentsManufactures garden and lawn tools. -
04/30/20 Salt Flat MaloufOffers home furnishing products including bedroom, outdoor,
living room, and office furniture.-
04/15/20 One Kings Lane CSC Generation Provides home furnishings through its online store. -
03/03/20 Value Plus Flooring Artisan Design GroupOffers hardwood, carpets, tile, and natural stone in its home furnishing retail stores.
-
02/25/20Alexis
ManufacturingRoll & Hill
Designs chairs and wood components for the Furniture industry.
-
02/21/20 Superior Quilting Mahanjan HomeManufactures bed pillows, decorative cushions, outdoor cushions, and bedding.
-
Source: Capital IQ, PitchBook, FactSet, and Capstone Research
SELECT TRANSACTIONS
6
Home Goods | December 2020
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PUBLIC COMPANY DATA: FURNITURE & HOME FURNISHING
Price % 52 Wk Market Enterprise LTM EV / LTM
Company 12/03/20 High Cap Value Revenue EBITDA Margin Revenue EBITDA
Casper Sleep Inc. $6.19 39.1% $250.9 $220.6 $473.6 NM NA 0.5x NM
Ethan Allen Interiors Inc. $18.81 98.0% $471.2 $536.6 $567.0 $74.0 13.1% 0.9x 7.2x
home24 SE $22.67 89.4% $598.7 $563.0 $526.8 $28.3 5.4% 1.1x 19.9x
La-Z-Boy Incorporated $38.40 90.0% $1,771.9 $1,746.4 $1,587.7 $267.5 16.8% 1.1x 6.5x
Purple Innovation, Inc. $29.16 87.4% $1,776.8 $1,724.8 $598.9 $74.7 12.5% 2.9x 23.1x
Sleep Number Corporation $72.18 97.1% $2,003.5 $2,378.6 $1,729.8 $206.0 11.9% 1.4x 11.5x
Tempur Sealy International, Inc. $25.29 97.5% $5,218.7 $6,864.3 $3,491.2 $659.4 18.9% 2.0x 10.4x
Mean 13.1% 1.4x 13.1x
Median 12.8% 1.1x 11.0x
Harmonic Mean 11.1% 1.1x 10.6x
EV = enterprise value; LTM = last twelve months
$ in millions, except per share data
NM = Not Meaningful
Source: Capital IQ as of December 3, 2020
7
PUBLIC COMPANY DATA: HOUSEHOLD PRODUCTS
Price % 52 Wk Market Enterprise LTM EV / LTM
Company 12/03/20 High Cap Value Revenue EBITDA Margin Revenue EBITDA
Hamilton Beach Brands $18.13 72.5% $248.1 $318.9 $575.3 $42.5 7.4% 0.6x 7.5x
Lifetime Brands, Inc. $14.09 97.4% $306.7 $666.6 $746.9 $83.3 11.2% 0.9x 8.0x
Newell Brands Inc. $21.77 99.4% $9,237.0 $14,910.0 $9,319.9 $1,478.1 15.9% 1.6x 10.1x
Spectrum Brands Holdings, Inc. $66.93 97.1% $2,883.5 $4,947.7 $3,964.2 $573.8 14.5% 1.2x 8.6x
Tupperware Brands Corporation $36.95 98.8% $1,817.0 $2,513.4 $1,667.7 $252.3 15.1% 1.5x 10.0x
Mean 12.8% 1.2x 8.8x
Median 14.5% 1.2x 8.6x
Harmonic Mean 11.8% 1.0x 8.7x
Home Goods | December 2020
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PUBLIC COMPANY DATA: LAWN & GARDEN
Price % 52 Wk Market Enterprise LTM EV / LTM
Company 12/03/20 High Cap Value Revenue EBITDA Margin Revenue EBITDA
Central Garden & Pet Company $39.01 87.1% $2,011.6 $2,173.9 $2,695.5 $299.9 11.1% 0.8x 7.2x
The Scotts Miracle-Gro Company $170.33 94.6% $9,494.2 $11,185.7 $4,131.6 $713.6 17.3% 2.7x 15.7x
The Toro Company $89.34 96.7% $9,586.0 $10,167.7 $3,272.2 $521.9 16.0% 3.1x 19.5x
Mean 14.8% 2.2x 14.1x
Median 16.0% 2.7x 15.7x
Harmonic Mean 14.3% 1.6x 11.9x
Source: Capital IQ as of December 3, 2020
8
PUBLIC COMPANY DATA: HOME GOODS RETAILERS
Price % 52 Wk Market Enterprise LTM EV / LTM
Company 12/03/20 High Cap Value Revenue EBITDA Margin Revenue EBITDA
Amazon.com, Inc. $3,186.73 89.7% $1,598,945.5 $1,627,357.5 $347,945.0 $49,336.0 14.2% 4.7x NM
Bed Bath & Beyond Inc. $19.57 74.8% $2,435.9 $4,551.8 $9,861.6 $969.1 9.8% 0.5x 4.7x
RH $458.15 98.0% $8,940.4 $10,659.8 $2,534.7 $590.1 23.3% 4.2x 18.1x
Target Corporation $174.92 96.6% $87,595.2 $96,604.2 $88,621.0 $8,827.5 10.0% 1.1x 10.9x
Walmart Inc. $149.30 97.2% $422,412.4 $483,360.4 $548,743.0 $41,408.8 7.5% 0.9x 11.7x
Wayfair Inc. $239.77 68.7% $23,844.7 $25,119.9 $13,007.8 $297.5 2.3% 1.9x NM
Williams-Sonoma, Inc. $111.11 96.9% $8,521.8 $9,292.4 $6,334.1 $1,407.7 22.2% 1.5x 6.6x
Mean 12.8% 2.1x 10.4x
Median 10.0% 1.5x 10.9x
Harmonic Mean 7.5% 1.2x 8.4x
Home Goods | December 2020
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9
KEY TAKEAWAYS
Lisa Tolliver, Senior Director
• COVID-19 has reshaped the Consumer Goods sector, driving consumer habits to shift and
permanently alter what we value, how and where we shop, in addition to how we live,
educate and work.
• Quarantine restrictions and work from home culture is fueling home goods spending across
furniture, home office, outdoor garden and patio décor, and investors are taking note of the
bright long-term outlook of these sectors.
• M&A activity is expected to accelerate for quality home goods companies with established
online and omnichannel presence, strong brand recognition, unique business models (i.e.,
vertical integration with in-house logistics, etc.) and differentiated product offerings.
• Most consumer-focused private equity groups have now shifted from managing their current
portfolios in the crisis to looking for new investments and are expected to be actively pursuing
both platform and add-on investments throughout 2021.
• Strategics will continue to be active, seeking to increase their e-commerce channel exposure,
diversify their product offerings into high growth categories and refine their sourcing
and logistics.
Home Goods | December 2020
-
Connor McLeod
Research Associate
[email protected] | 617-619-3319
Connor is a Research Associate at Capstone Headwaters primarily specializing in Building Products &Construction Services, Consumer & Retail, Healthcare, and Cybersecurity. Prior to joining CapstoneHeadwaters, Connor was a specialist with the Investor Services team at BlackRock where he worked withmutual funds, closed end funds, and exchange traded funds and communicated fund performance,relevant market dynamics, and facilitated trades for shareholders, financial advisors, and institutionalclients. Connor holds a BA in Economics from Bates College and is a Series 7 RegisteredSecurities Representative.
HOME GOODS REPORT CONTRIBUTORS
10
Lisa Tolliver
Senior Director
[email protected] | 773-791-9493
Lisa has over 20 years of experience in the investment banking industry, primarily focused on advisingmiddle market private business owners in liquidity related transactions. As a Senior Director in CapstoneHeadwaters’ Consumer practice, she works closely with clients to advise and execute domestic andcross-border M&A transactions, recapitalizations and capital raises. Lisa has deep M&A expertise andknowledge of businesses in the e-commerce sector, particularly related to those selling via direct-to-consumer, Amazon, mass and OTC channels. Prior to Capstone, Lisa worked in the Capital StrategiesGroup at Morgan Stanley Smith Barney and spent 10 years working for the middle market investmentbanking arm of Citigroup, where she was involved in the evaluation, marketing and closing of numeroustransactions involving private businesses and corporate divestitures. Lisa received her BA on academicscholarship from Illinois State University and is a Series 7 and 63 Registered Securities Representative.
Brianna Conway
Associate
[email protected] | 847-849-0913
Brianna is an Associate in the firm’s Chicago office, working closely with private business owners toadvise and execute mergers, acquisitions and strategic capital raises. Prior to joining CapstoneHeadwaters, Brianna was an Analyst at PwC Corporate Finance on their M&A team where she focusedon healthcare provider and services sell-side transactions. Brianna graduated with honors from IndianaUniversity’s Kelley School of Business with a major in Business Economics and Public Policy. She holdsher Series 7, 63 and 79 licenses.
Home Goods | December 2020
Kenneth Wasik
Managing Director
[email protected] | 917-434-6124
Ken joined Capstone Headwaters to lead the Consumer & Retail practice. He brings nearly 25 years of
investment banking experience including domestic and international mergers & acquisitions, initial and
secondary offerings of public companies, debt raises and private placements for his clients. He has
helped raise over $10 billion in capital for clients during his career. He joins Capstone from Stephens
Investment Bank, where he started and led the Consumer Products Group. Prior to Stephens, Ken was
with Jefferies and Co. as Managing Director of Consumer Products. Before Jefferies and Co., he was
Head of the Consumer, Food and Retail Group at Houlihan, Lokey, Howard, and Zukin, and was
responsible for building out Houlihan’s consumer and retail coverage universe, as well. Ken began his
career in Investment Banking at UBS in New York, NY, where he supported execution of large packaged
goods companies. Ken is a Series 79 Registered Investment Banking Representative and holds an MBA
in Finance from Columbia University and a BS in Accounting from St. Joseph’s University.
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FIRM TRACK RECORD
Capstone Headwaters professionals have represented clients across the Consumer Products & Services industry. This focus
allows Capstone Headwaters to provide Home Goods clients with real-time transaction feedback and immediate access to
key decision makers among the industry’s most active acquirers and investors. A sampling of Capstone Headwaters' closed
transactions is shown below:
11
Home Goods | December 2020
CONFIDENTIAL
Leading E-commerce
Provider of
Soft Home Goods
has been acquired byhas been acquired by
Under LOI
a portfolio company of
has been acquired by
has recapitalized with
has merged with
a portfolio company of
has partnered with
has been acquired by has been acquired by
CONFIDENTIAL
E-commerce Provider
of Flowers & Gift
Products
Capital Raise
CONFIDENTIAL
Retailer & Online Seller of
Jewelry, Gift & Home
Products
Market Prep
CONFIDENTIAL
Designer & Seller of
Protective Electronics
Accessories
Market Prep
-
CITATIONS
1. Wayfair, “Wayfair Announces Second Quarter 2020 Results,”
https://s24.q4cdn.com/589059658/files/doc_financials/2020/q2/Q2-2020-Press-Release.pdf, accessed October 19, 2020.
2. Williams-Sonoma, “Williams-Sonoma, Inc. announces second quarter 2020 results,” https://ir.williams-
sonomainc.com/investor-information/news-releases/news-release-details/2020/Williams-Sonoma-Inc.-announces-
second-quarter-2020-results/default.aspx, accessed October 19, 2020.
3. Casper, “Investor Presentation September 2020,” https://ir.casper.com/home/default.aspx, accessed October 20, 2020.
4. U.S. Census Bureau, “Monthly Retail Trade Report,” https://www.census.gov/retail/index.html, accessed October 19,
2020.
5. Purple Innovation, “Purple Innovation Reports Record Second Quarter 2020 Results,”
https://investors.purple.com/press-releases/news-details/2020/Purple-Innovation-Reports-Record-Second-Quarter-
2020-Results/default.aspx, accessed October 19, 2020.
6. Signifyd, “Year Over Year Ecommerce Growth,” https://www.signifyd.com/ecommerce-pulse-data/, accessed October
19, 2020.
7. Sleep Number, “Q3 2020 Earnings Call,” https://s25.q4cdn.com/489093953/files/doc_financials/2020/q3/Q3-2020-
Earnings-Call_2020-10-14_Transcript.pdf, accessed October 19, 2020.
8. Tempur Sealy, “Tempur Sealy Reports Second Quarter 2020 Results,” http://investor.tempursealy.com/news-
releases/news-release-details/tempur-sealy-reports-second-quarter-2020-results, accessed October 19, 2020.
9. Tempur Sealy, “Tempur Sealy Provides Update of Improved Business Trends,” http://investor.tempursealy.com/news-
releases/news-release-details/tempur-sealy-provides-update-improved-business-trends, accessed October 20, 2020.
10. Scotts Miracle-Gro Company, “FQ# 2020 Earnings Call Transcripts,” https://scottsmiraclegro.gcs-web.com/static-
files/b73f181c-2a62-4003-b4c6-97771d1e0235, accessed October 17, 2020.
11. HNI Corporation Announces Agreement to Acquire Design Public Group,”
https://www.businesswire.com/news/home/20201201006024/en/HNI-Corporation-Announces-Agreement-to-Acquire-
Design-Public-Group, accessed December 4, 2020.
12. UBS, “Bed Bath & Beyond,” https://www.ubs.com/global/en/our-firm/what-we-do/research.html, accessed October 20,
2020.
13. Home Textiles Today, “Bed Bath & Beyond sells Christmas Tree Shops and hospitality operation,”
https://www.hometextilestoday.com/financial/bed-bath-beyond-sells-christmas-tree-shops-and-hospitality-operation/,
accessed October 19, 2020.
14. Cision, “Brand Velocity Partners Acquires BBQGuys, the Leading E-Commerce Platform Dedicated to Outfitting Outdoor
Living Spaces for Everything BBQ And Beyond,” https://www.prnewswire.com/news-releases/brand-velocity-partners-
acquires-bbqguys-the-leading-e-commerce-platform-dedicated-to-outfitting-outdoor-living-spaces-for-everything-
bbq-and-beyond-301138836.html, accessed October 18, 2020.
Disclosure: This report is a periodic compilation of certain economic and corporate information, as well as completed and announced merger and acquisi-
tion activity. Information contained in this report should not be construed as a recommendation to sell or buy any security. Any reference to or omission of
any reference to any company in this report should not be construed as a recommendation to buy, sell or take any other action with respect to any security of
any such company. We are not soliciting any action with respect to any security or company based on this report. The report is published solely for the
general information of clients and friends of Capstone Headwaters. It does not take into account the particular investment objectives, financial situation or
needs of individual recipients. Certain transactions, including those involving early-stage companies, give rise to substantial risk and are not suitable for all
investors. This report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied
upon as such. Prediction of future events is inherently subject to both known and unknown risks and other factors that may cause actual results to vary
materially. We are under no obligation to update the information contained in this report. Opinions expressed are our present opinions only and are subject
to change without notice. Additional information is available upon request. The companies mentioned in this report may be clients of Capstone Headwaters.
The decisions to include any company in this report is unrelated in all respects to any service that Capstone Headwaters may provide to such company. This
report may not be copied or reproduced in any form, or redistributed without the prior written consent of Capstone Headwaters. The information contained
herein should not be construed as legal advice.
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Home Goods | December 2020
https://s24.q4cdn.com/589059658/files/doc_financials/2020/q2/Q2-2020-Press-Release.pdfhttps://ir.williams-sonomainc.com/investor-information/news-releases/news-release-details/2020/Williams-Sonoma-Inc.-announces-second-quarter-2020-results/default.aspxhttps://ir.casper.com/home/default.aspxhttps://www.census.gov/retail/index.htmlhttps://investors.purple.com/press-releases/news-details/2020/Purple-Innovation-Reports-Record-Second-Quarter-2020-Results/default.aspxhttps://www.signifyd.com/ecommerce-pulse-data/https://s25.q4cdn.com/489093953/files/doc_financials/2020/q3/Q3-2020-Earnings-Call_2020-10-14_Transcript.pdfhttp://investor.tempursealy.com/news-releases/news-release-details/tempur-sealy-reports-second-quarter-2020-resultshttp://investor.tempursealy.com/news-releases/news-release-details/tempur-sealy-provides-update-improved-business-trendshttps://scottsmiraclegro.gcs-web.com/static-files/b73f181c-2a62-4003-b4c6-97771d1e0235https://www.businesswire.com/news/home/20201201006024/en/HNI-Corporation-Announces-Agreement-to-Acquire-Design-Public-Grouphttps://www.ubs.com/global/en/our-firm/what-we-do/research.htmlhttps://www.hometextilestoday.com/financial/bed-bath-beyond-sells-christmas-tree-shops-and-hospitality-operation/https://www.prnewswire.com/news-releases/brand-velocity-partners-acquires-bbqguys-the-leading-e-commerce-platform-dedicated-to-outfitting-outdoor-living-spaces-for-everything-bbq-and-beyond-301138836.html
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