By Maureen Flanagan
CamelBak Products, Inc., based in Petaluma, CA, is the world's leader in the design, manufacturing and marketing of portable hands-free hydration systems. The company commands a significant share in its markets with products and proprietary technology that let recreational users as well as military users remain better hydrated wherever they are. Since 1998, the company has achieved significant growth, fueled by increased penetration of existing markets and a steady stream of new and innovative products that facilitate entry into new markets.
In a November 25, 2003 transaction, CamelBak was acquired by Bear Stearns Merchant Banking, the private equity arm of Bear, Stearns & Co., Inc. In support of the acquisition, American Capital Strategies, Ltd. (Nasdaq: ACAS) provided a $38 million investment in the form of senior and junior subordinated debt.
CamelBak has traveled a long way since 1988 when a paramedic, using an IV bag and surgical tubing, devised the first hands-free hydration system. The company he founded now produces more than 50 lines of customized backpacks with built-in water storage and delivery systems and holds several utility patents on key product features The company's products have technologically advanced reservoirs and fluid systems designed to meet the needs of a variety of end users. Products include exclusive features such as the Big Bite Valve and HydroLock to permit easy shut-off and prevent leakage. All components are easy to clean, easy to fill and taste free. A wide range of recreational users, including cyclists, hikers, skiers and runners now turn to CamelBak products such as the ZoidT, pictured at left, a light weight, easy to refill and convenient recreational activity backpack. More specialized systems and features are designed for government and military users. CamelBak designs and products are also integrated into special equipment used by industrial workers, the company's newest market.
Over the past year, the company has launched a number of new products and major redesigns featuring technological improvements. Noteworthy introductions include chemical and biological resistant hydration systems which allow users to drink through gas masks while fully protected, and an in-line microfilter which enables water to be filtered as it is consumed. New products include lightweight packs with maximum ventilation for cycling and day hiking enthusiasts, a hunting line with camouflage colors and a line designed to appeal to women.
The company manufactures products in its own facilities and outsources from various vendors. Products are sold to thousands of customers, including the country's top sporting goods retailers, the military and specialized distributors.
In the November 2003 transaction, the Bank of New York and BNP Paribas provided senior financing alongside American Capital's investment. Bear Stearns Merchant Banking invested in preferred and common membership units.
CamelBak joins American Capital's diversified portfolio that currently includes more than 80 companies. Since 1997, ACAS investments in the middle-market have totaled over $2 billion.
For more information about American Capital's portfolio click here.
CamelBak enjoys high brand awareness with hard-core users as well as a growing number of mainstream users. The international market, which is at an earlier stage of development than the United States, offers further opportunities for growth.
CamelBak also has significant opportunities in the government and military market. Brand awareness and adoption rates have spread rapidly from U.S. special forces to broader military, law enforcement and international markets. This trend has been accelerated by the high performance of CamelBak products during the Middle East conflicts, where company products are used by military personnel. Pictured at right is the MotherLodeT backpack, an essential item for hydration and storage of tools and communications devices for military personnel.
The emphasis on homeland security also creates new demand for products as agencies increase their readiness to meet emergencies. CamelBak's popularity with law enforcement personnel is driven by the need to avoid dehydration during extended operations, where staying alert is a life-and-death issue.
The company's successful track record of new product launches supported by CamelBak's strong brand name, reputation for quality and strong end-user loyalty give the company a solid platform for future growth.
As it moves into high gear, CamelBak is committed to making hydration products that will ensure water is available anywhere and everywhere.
