By Maureen Flanagan
Flexi-Mat Corporation, founded 1948 in Chicago, IL by Joseph Elesh, the father of Flexi-Mat's current President, James Elesh, is the leading producer, importer and marketer of pet beds. With a history of product innovation, the company has led the commercialization of pet beds for over 35 years. Many industry staples are products introduced by Flexi-Mat, including decorative fabrics, cedar/synthetic fiber blended filling, anti-microbial fabrics and orthopedic foam filling. The company's dominant position enables it to sell branded products through all retail channels, including mass merchants, pet superstores, independent pet stores, and catalog and internet retailers.
On October 31, 2003, American Capital Strategies, Ltd. (Nasdaq: ACAS) invested $54 million in the one stop buyout of Flexi-Mat. American Capital provided the entire financing package, including a revolving credit facility, senior term loans, subordinated debt, and preferred and common equity. Flexi-Mat management also invested significantly in the transaction.
"With this investment, American Capital is backing the growth of a market leader that has excelled in its industry through its dedication to product innovation, product breadth, including patented products, the leadership of an experienced management team and low cost operations, including overseas outsourcing," said American Capital Managing Director Tom Gregory. "In addition, Flexi-Mat has established strong, long lasting relationships with leading retailers by providing significant value-added services such as stylish, updated product design, inventory and logistics management and a high level of customer service. A market leader with great potential, Flexi-Mat is in an ideal position to meet the rapidly growing market demand for pet beds as pet ownership and spending continues to increase in the U.S."
Offering the largest line of pet beds on the market, Flexi-Mat products include indoor and outdoor beds, orthopedic beds and heated beds. The company's Orthonapper� orthopedic bed, pictured at left, is designed to reduce pressure over a pet's entire body. Always strong in product innovation, the company recently introduced several new products, including the ScenturionTM line featuring activated carbon fabric that eliminates pet odors. Many other products are well recognized by pet owners throughout the country and include Catnapper�, Mysterious Kitty Kuddler�, Purr Padd�, Dognapper�, Corry's CouchTM, Snuggle Ball�, Cuddler�, Cuddle-Up� Bed and Bolster Bed. The company holds patents on three of its most popular items, including Bolster Bed, which is sold primarily through higher end catalogs and pet supply retailers. Flexi-Mat pet beds are marketed under the company's own brand name as well as the private label brands of major retailers.
Pictured at right is the Catnapper�, a cozy bed that attaches to windowsills, allowing cats to relax and enjoy looking outside.
In the October 2003 transaction, American Capital provided the entire $54 million financing package to complete the buyout. Flexi-Mat joins American Capital's portfolio of companies, which represent investments of approximately $2 billion since its IPO in 1997. Currently American Capital's portfolio comprises more than 80 companies in a wide range of industries.
For more information about American Capital's portfolio click here.
More than 64 million U.S. households own pets. Per capita spending on pets is increasing rapidly, reflecting the trend of Americans to treat their pets as a family member. The pet bed segment of the $7.9 billion pet supplies industry is expected to grow 8% to $181 million in 2005. And, as the number of dogs and cats who sleep in beds steadily increases (a growth rate of 10% and 24% respectively from 1998 to 2002), Flexi-Mart will likely have opportunity for continued growth. Mass merchants and the club stores are expected to lead the way with increased aisle space devoted to pet supplies.
The company continues to improve operations, cut costs and add new customers and product lines targeted to market growth segments. In addition to outsourcing to Mexico, Flexi-Mat has cut operating costs through outsourcing agreements in Asia. These competitive advantages and will enable the company to offer lower cost product lines for distribution to small retailers and independent pet stores, markets which are particularly sensitive to pricing.
As the market leader and innovator, Flexi-Mat is poised to take advantage of market opportunities and remain top dog for pet bedding products.
