Cisco Martinez

September, 27 2011

Spyder Active Sports, Inc.

04/15/2023

Executive summary

1978 19861982 19971998 2004

Jacobs starts

Spyder

Partners with Shimokubo

50/50 partnershi

p

CHB acquires 22% of Spyder

CHB contributes additional $2MM for

37.9%

CHB exit

CHB37.9%

David Jacobs25.4%

Shimokubo

25.4%

Jake Jacobs11.3%

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 Executive2. IT procurement and

implementation3. Develop concept shop or fixed

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Decisions for Spyder

• What is the Firm’s Value?• Strategic Acquirer or Financial

Acquirer?• Total Company or Minority Stake?

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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

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Valuation estimates

Comparable Companies

Comparable Transactions

DCF Strategic w/Synergies

DCF Financial Buyer

$40 $60 $80 $100

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Considerations for the owners

CHB• If sold to Financial Buyer:

Value of CHB Equity = $36.8MMIRR = 38%

• If sold to Strategic Buyer:Value of CHB Equity = $24.9MMIRR = 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

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What happened to Spyder?

In 2004 Apax Partners buys 85% of Spyder for $100MM

42% IRR for CHBAfter bidding war between Apax and VF Corp, a

strategic buyer, Jacobs chose financial buyer ApaxApax wanted current leadership

Jacobs serves as Chairman of the Board and son Jake on Board

Growth plan: market segmentation & multi-seasonIn 2008 Spyder acquires Cloudveil Mountain Works

Multi-seasonal appareloutdoor, snow sports, fly-fishing, casual

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Appendix

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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 $97,163.7087,447.33$

106,880.08$

IRR 38%

Year Return (Investment)0 (2,500.00)$ 1 (2,000.00)$ 2 03 04 05 06 07 36,825.04$

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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 synergiesNPV $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$

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Multiples

Date Date Ent. Value LTM Sales LTM EBITDA Sales EBITDA Acquiror Target Announced Effective ($ millions) ($ millions) ($ millions) Multiple Multiple

Columbia Sportswear Co. Mountain Hardwear Inc. 3/13/03 4/1/03 36 31 3.2 1.2 11.1 VF Corp. Nautica Enterprises Inc. 7/7/03 8/27/03 600 694 66 0.9 9.1 Nike Inc. Converse Inc. 7/9/03 9/4/03 335 205 36 1.6 9.4 Bear Stearns & Co. CameIBak Inc. 11/6/03 12/2/03 209 74 25 2.8 8.2

Transaction multiples

Trading multiples Five-Year Company Name Industry Betab Market Value of Equityc LTM Interest-Bearing Debt Average Debt-to-Value LTM Sales LTM EBITDA Multiplier Adidas-Sa lomon AGd Sports Apparel , Footwear, & Equipment 0.81 4,302 1,459 0.39 6,221 586 7.3 Columbia Sportswear Co. Sports Apparel 1.48 2,239 20 0.06 990 220 10.2 K2 Inc. Sports Equipment 1.36 559 209 0.41 839 63 8.9 Quiks i lver Inc.f Sports Apparel 1.01 1,217 138 0.17 1,039 130 9.4 Skis Ross ignol 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

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