After operating independently for 41 years with only one shareholder (founder Rick Reimers) and one CEO (Reimers, again), Sun Mountain Sports underwent a change of ownership in early March 2022. That is when Reimers completed the sale of the Missoula, Montana, concern best known for its innovative golf bags, carts and outerwear for an undisclosed but surely substantial amount. The buyer: Solace Capital Partners, a Los Angeles private-equity investment firm that looks for opportunities with established lower middle-market businesses in the United States and Canada.
Reimers was reluctant to part with the company he had built from scratch into a business producing annual revenues of more than $50 million. A native of South Dakota and a one-time golf professional who had toiled at municipal courses and driving ranges in California, he had long demonstrated both a knack and a passion for developing new and very marketable products. But as he approached his 70th birthday and reflected on a successful but exhausting battle with leukemia as well as a post-COVID boom in golf, he decided it was time to make a move, selecting Solace from a handful of interested buyers.
In some ways, very little has changed at Sun Mountain in the 17 months since the deal went down. The company is still based in the Big Sky State, and the current CEO is a one-time smoke jumper named Ed Kowachek who had served as president of Sun Mountain for more than two decades before taking over for Reimers as CEO after the sale. The primary products remain golf bags, carts, outerwear and more recently travel covers. And the mission to offer cutting edge, best-in-class golf gear is the same. So is the culture of a place that has long valued its skilled and dedicated workforce.
But much is also different. And as far as Kowachek is concerned, that is a good thing.
“Solace is investing more resources than ever before in design, marketing and sales management at Sun Mountain,” said the native Chicagoan who came to Missoula in 1971 to study forestry and geology at the University of Montana before taking what was supposed to be a temporary job at Sun Mountain in 1985. “That will enable us to grow in all sales channels. Solace has also brought in lots of good ideas related to finances, management and brand building while helping us develop a better approach to grow the business.”
“We never had a director of international sales,” added Kowachek, whose early work at the company included fixing the sewing machines it used to make golf bags. “But now we do. It had been years since we last had a national sales manager and engaged a marketing firm. We have both now and are in the process of recruiting a new chief marketing officer, too.
“Solace believes that it is important to grow the top line, and by doing so, the bottom line will come along. And with their input, financially and managerially, I believe we can take Sun Mountain to the next level and grow it from 16 to 17 percent annually.
“We were solid as they come from a design and product quality standpoint. What we lacked was the marketing and sales engine. Now, we have that.”
“With Solace as a partner, we are able to grow the business with new resources. I cannot wait to get to the office each morning.” – Ed Kowachek
Sun Mountain formally came to be in 1981, and it was not long before Reimers started turning the previously staid golf bag category upside down. He created the first stand bag and then pioneered the dual strap technology allowing golfers to carry their clubs on their backs like a knapsack. Later, Reimers brought out the first push cart, modeled after a store-bought “baby jogger,” and then “electrified” the space with the self-propelled Speed E Cart.
According to Kowachek, Sun Mountain produced roughly $60 million in revenues in 2022. And that number is expected to have risen when the books on 2023 are closed. Some 60 percent of sales come from golf bags, with outerwear contributing a tad north of 15 percent and carts a bit south of that number. The new owners believe outerwear in particular has great growth potential. And Kowachek is not the only one at Sun Mountain who feels that travel covers, i.e. the bags golfers use to carry and protect their clubs when they take their games on the road, have promise. In fact, he expects the segment to generate as much as $7 million in sales in 2023.
While there is little doubt in Kowachek’s mind about the growth potential of Sun Mountain across all categories, he has no idea how long it will be before Solace “terms” the company, which in layman’s terms means selling it once Solace feels its investment will bring the most optimal return. And as a rule, those types of firms rarely hold the businesses they buy for more than five or six years, if that long.
But that uncertainty does not worry the CEO in the least.
“With Solace as a partner, we are able to grow the business with new resources,” he said. “I cannot wait to get to the office each morning.”
The sale, it seems, is working out for all involved.