This document provides an overview of Spyder Active Sports, Inc. from 1978 to 2004. It discusses the company's founding, growth, and ownership changes over time. By 2004, Spyder was considering a potential sale. Financial projections valued the company between $40-100 million depending on the valuation method. The owners ultimately chose to sell 85% of Spyder to Apax Partners, a financial acquirer, for $100 million.

1. Cisco Martinez
September, 27 2011
Spyder Active Sports, Inc.

2. Executive summary
1978 19861982 1997 1998 2004
Jacobs starts
Spyder
Partners with
Shimokubo
50/50
partnership
CHB acquires
22% of Spyder
CHB contributes additional
$2MM for 37.9%
CHB
exit
CHB
37.9%
David Jacobs
25.4%
Shimokubo
25.4%
Jake Jacobs
11.3%
Spyder timeline
Spyder ownership as of 2004
Spyder Active Sports, Inc.
• David Jacobs founder – 40 years of
outdoor sporting apparel market
experience
• Spyder founded in 1978 – focused on
high end ski retail market
• Tsunehisa Shimokubo partnership
• Jake Jacobs (David’s son) - product
design, international and outside
business experience
• 1995 sales plateau ($10-15MM)
CHB
“Closely Held Businesses” – PE firm
focused on business improvement to meet
IRR goals
Contributions:
1. Organizational structure – hire Senior
Marketing Executive
2. IT procurement and implementation
3. Develop concept shop or fixed
program
5/15/20152

3. Decisions for Spyder
• What is the Firm’s Value?
• Strategic Acquirer or Financial Acquirer?
• Total Company or Minority Stake?
5/15/20153

4. Assumptions for DCF
For Financial Acquirer
• 30% Discount Rate
• 27.5% Growth Rate
• Financial Acquirers
tend to demand higher
rates of return, and
generally are more
aggressive in their
forecasts
For Strategic Acquirer
• 25% Discount Rate
• 20% Growth Rate
• Added 25% for possible
synergies
5/15/20154

5. Valuation estimates
$40 $60 $80 $100
Comparable Companies
Comparable
Transactions
DCF Strategic
w/Synergies
DCF Financial Buyer
5/15/20155

6. Considerations for the owners
CHB
• If sold to Financial Buyer:
Value of CHB Equity = $36.8MM
IRR = 38%
• If sold to Strategic Buyer:
Value of CHB Equity = $24.9MM
IRR = 30%
Jacob’s
• At age 70, to exit himself or
not?
• Sell controlling ownership
or minority stake
• Sell control → higher
price
• How will Spyder proceed if
bought out?
• Stability for his sons
5/15/20156

7. What happened to Spyder?
 In 2004 Apax Partners buys 85% of Spyder for $100MM
 42% IRR for CHB
 After bidding war between Apax and VF Corp, a strategic
buyer, Jacobs chose financial buyer Apax
 Apax wanted current leadership
 Jacobs serves as Chairman of the Board and son Jake on Board
 Growth plan: market segmentation & multi-season
 In 2008 Spyder acquires Cloudveil Mountain Works
 Multi-seasonal apparel
 outdoor, snow sports, fly-fishing, casual
5/15/20157

8. Appendix
5/15/20158

9. DCF model financial buyer
FY2004 FY2005E FY2006E FY2007E FY2008E Terminal
EBITDA 9,582.00$ 13,771.00$ 16,983.00$ 21,777.00$ 27,895.00$
less Depr & Amort 744.00$ 1,078.00$ 2,097.00$ 3,260.00$ 3,098.00$
EBIT 8,838.00$ 12,693.00$ 14,886.00$ 18,517.00$ 24,797.00$
EBIT x 1-tax rate
(45%) 4,860.90$ 6,981.15$ 8,187.30$ 10,184.35$ 13,638.35$
plus Depr & Amort 744.00$ 1,078.00$ 2,097.00$ 3,260.00$ 3,098.00$
Less NWC 69.00$ 1,590.00$ 929.00$ 1,292.00$ 1,459.00$
Less CapEx 1,797.00$ 2,619.00$ 3,000.00$ 3,500.00$ 4,250.00$
FCF 3,738.90$ 3,850.15$ 6,355.30$ 8,652.35$ 11,027.35$ 306,845.00$
DCF 2,961.65$ 3,760.53$ 3,938.26$ 3,860.98$ 82,642.28$
Discount Rate 30%
Average Expected
Growth Rate 27.5%
NPV $97,163.70
87,447.33$
106,880.08$
IRR 38%
Year Return (Investment)
0 (2,500.00)$
1 (2,000.00)$
2 0
3 0
4 0
5 0
6 0
7 36,825.04$
5/15/20159

10. DCF model strategic buyer
FY2004 (actual) FY2005E FY2006E FY2007E FY2008E Terminal
EBITDA 9,582.00$ 13,771.00$ 16,983.00$ 21,777.00$ 27,895.00$
less Depr & Amort 744.00$ 1,078.00$ 2,097.00$ 3,260.00$ 3,098.00$
EBIT 8,838.00$ 12,693.00$ 14,886.00$ 18,517.00$ 24,797.00$
EBIT x 1-tax rate (45%) 4,860.90$ 6,981.15$ 8,187.30$ 10,184.35$ 13,638.35$
plus Depr & Amort 744.00$ 1,078.00$ 2,097.00$ 3,260.00$ 3,098.00$
Less NWC 69.00$ 1,590.00$ 929.00$ 1,292.00$ 1,459.00$
Less CapEx 1,797.00$ 2,619.00$ 3,000.00$ 3,500.00$ 4,250.00$
FCF 3,738.90$ 3,850.15$ 6,355.30$ 8,652.35$ 11,027.35$ 111,580.00$
DCF 3,080.12$ 4,067.39$ 4,430.00$ 4,516.80$ 36,562.53$
Discount Rate 25%
Average Expected Growth Rate 20%
+25% in synergies
NPV $52,656.85 $65,821.07
47,391.17$ 59,238.96$
57,922.54$ 72,403.17$
IRR 30%
Year Return (Investment)
0 (2,500.00)$
1 (2,000.00)$
2 -$
3 -$
4 -$
5 -$
6 -$
7 24,946.18$
5/15/201510

11. Multiples
Date Date Ent.Value LTMSales LTMEBITDA Sales EBITDA
Acquiror Target Announced Effective ($millions) ($millions) ($millions) Multiple Multiple
ColumbiaSportswearCo. MountainHardwearInc. 3/13/03 4/1/03 36 31 3.2 1.2 11.1
VFCorp. NauticaEnterprisesInc. 7/7/03 8/27/03 600 694 66 0.9 9.1
NikeInc. ConverseInc. 7/9/03 9/4/03 335 205 36 1.6 9.4
BearStearns&Co. CameIBakInc. 11/6/03 12/2/03 209 74 25 2.8 8.2
Transaction multiples
Trading multiples
Five-Year
Company Name Industry Betab MarketValueofEquityc LTMInterest-Bearing Debt AverageDebt-to-Value LTMSales LTMEBITDA Multiplier
Adidas-Salomon AGd Sports Apparel,Footwear,&Equipment 0.81 4,302 1,459 0.39 6,221 586 7.3
Columbia SportswearCo. Sports Apparel 1.48 2,239 20 0.06 990 220 10.2
K2Inc. Sports Equipment 1.36 559 209 0.41 839 63 8.9
QuiksilverInc.f Sports Apparel 1.01 1,217 138 0.17 1,039 130 9.4
Skis Rossignol SA.g Sports Equipment&Apparel 0.55 174 118 0.44 479 25 7.0
VF Corp. Apparel,incl.Sports Apparel 0.59 5,113 994 0.2 5,390 725 7.1
5/15/201511