Target Overview

Empire Distributing, co-founded in 1978 by Mike and Lois Rupp in Arcade, New York, is a leading distributor in the outdoor living and hearth products sector. The company services over 780 dealers across the Northeast and Midwest United States, offering a comprehensive range of products including fireplaces, stoves, gas logs, inserts, fire pits, fire tables, BBQ grills, kitchen islands, outdoor heaters, and fireplaces. With an extensive portfolio comprising more than 75 product lines from over 100 industry-leading manufacturers, Empire Distributing operates from nearly 200,000 square feet of office and warehouse space across three facilities, positioning itself as a prominent player in the industry.

The company has established a robust dealer distribution network that enhances the Patio Consolidation Platform’s overall capabilities. This acquisition enables Blackford Capital to leverage Empire's extensive resources and relationships, thereby facilitating expansion into new geographical markets while enriching the breadth of product offerings available to customers.

Industry Overview in the United States

The outdoor living market in the United States has experienced significant growth as homeowners increasingly prioritize outdoor spaces for leisure and entertainment. This sector encompasses a variety of products designed to enhance the functionality and aesthetic appeal of outdoor environments. As a result of shifting consumer preferences, the outdoor living industry is poised for further expansion, driven by a growing appetite for innovative solutions that enable homeowners to maximize their outdoor experiences.

Moreover, the realms of hearth products are witnessing a renaissance as modern consumers seek energy-efficient and aesthetically pleasing solutions for their homes. The increasing emphasis on sustainability and eco-friendly products has led manufacturers to innovate and create more environmentally responsible options. Thus, the hearth industry is becoming an essential part of the broader outdoor living market.

Market dynamics are also shifting due to technological advancements, with smart home systems being integrated into outdoor environments to enhance comfort and convenience. As a result, the outdoor living product offerings are diversifying, creating opportunities for distributors and manufacturers alike. This also signals a robust potential for further investment and expansion within the sector.

Additionally, the COVID-19 pandemic has reshaped consumer behaviors, leading to a heightened focus on home investment. With more individuals spending time at home, particularly in outdoor settings, the demand for quality outdoor living products has surged, further solidifying the growth potential of this industry.

Rationale Behind the Deal

The acquisition of Empire Distributing is a strategic move by Blackford Capital to expand its Patio Consolidation Platform and enhance its market presence in the outdoor living and hearth product segments. By integrating Empire Distributing's extensive product ranges and strong dealer relationships, Blackford aims to create a comprehensive omnichannel platform that serves as a one-stop-shop for customers.

This acquisition aligns with Blackford’s vision of operational efficiency and synergy, as it seeks to broaden its distribution channels and enhance product offerings. Empire's established infrastructure and market reach will significantly contribute to Blackford's growth trajectory in the outdoor living sector, capitalizing on emerging market trends and consumer demands.

Investor Information

Blackford Capital is a private equity firm based in Grand Rapids, Michigan, established in 2010. The firm specializes in acquiring and managing lower-middle-market companies, with a focus on sectors such as manufacturing, industrial, and distribution. Blackford has a proven track record of delivering exceptional returns through a disciplined approach to value creation and operational excellence.

Throughout its years of operation, Blackford Capital has garnered numerous accolades, such as being named a Founder-Friendly Investor by Inc. and receiving multiple awards for its outstanding deal-making efforts. The firm's strategic acquisitions underscore its commitment to fostering growth in niche markets while adhering to a compelling investment philosophy.

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The acquisition of Empire Distributing by Blackford Capital could be considered a sound investment backed by strong strategic reasoning. The expansion of Blackford's platform through this addition enhances its operational capabilities and product diversity, positioning it well for capturing increased market demand in the outdoor living sector. Given the current trends favoring outdoor living investments, this move opens avenues for substantial growth potential.

Empire Distributing's established dealer network and substantial inventory provide a solid foundation for the integration. As market dynamics shift towards more emphasis on outdoor living, Empire is poised to leverage its brand reputation and product offerings to attract more customers. Thus, aligning with Blackford's objective of building a comprehensive platform enhances the investment's overall value.

Furthermore, Jeremy Rupp's continued leadership after the acquisition ensures a smooth transition and operational continuity, which is vital for maintaining employee morale and dealer relations. His extensive experience in distribution and sales operations will be instrumental in driving the collective success of the newly expanded platform.

In conclusion, the combination of Empire Distributing’s strengths with Blackford Capital’s strategic vision and resources presents an appealing opportunity for growth. This acquisition could significantly enhance market competitiveness and foster long-term success within the increasingly vibrant outdoor living market.

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