Boa Technology Inc., creator of the Boa Fit System, a footwear performance technology offering an alternative to traditional laces, buckles or straps for precision fit, is under new ownership. Compass Diversified (CODI), a Westport, Conn., holding company with a portfolio of middle-market businesses, has acquired the footwear fastening tech firm for $454 million.
Founded in 2001 with a rotational, dial-based performance fit system that changed how snowboarders put on their boots, the Boa Fit System has tethered itself to premium brand partner products across an array of segments, including snowboarding, cycling, golf, hiking and trail, mountaineering, running, court sports, workwear and medical.
The Boa wrap system is designed to improve connectivity to the midsole and heel, while allowing for a roomier toe box that improves an athlete’s perception or awareness of the position and movement of the body.
Boa already has 400 brand partners that have integrated its technology, including Adidas, La Sportiva, Saucony and Vans. The company also has 160 global product patents, with 85 more currently pending.
“Born out of a simple, yet innovative idea to dramatically improve the fit and performance of snowboard lacing systems, Boa has continued to push the boundaries of what is possible, developing new ways to improve performance across a range of products with the Boa Fit System,” Boa CEO Shawn Neville said in a statement. “This announcement is a testament to the incredible dedication of our global team and our great brand partners around the world, and we look forward to working closely with the talented team at CODI to build on our momentum. With significant operational experience, global resources and a proven track record of collaborating with and building leading branded consumer companies over the long term, CODI is the right partner for Boa as we enter this exciting next chapter in our growth story.”
The company was enticing for Compass Diversified, which scoops up niche brands that are typically leaders in their respective markets. In a conference call, Compass CEO Elias Sabo said Boa meets its acquisition criteria, including a “highly defensible market position, favorable long-term macroeconomic trends in the market in which the company operates, strong margins and minimal capex requirements and low technological or product obsolescence rates.”
The footwear areas in which BOA operates represent a significant addressable market opportunity, with 700 million pairs of shoes sold globally in prices and categories where the company’s products enhance value. Yet Boa’s current Fit System sales represent only 3 percent of the market—16 to 17 million pairs annually.
“We think we’re really early in terms of this product getting into the marketplace,” Sabo said. “We think that’s there’s huge runway. In certain categories there’s a premium nature that the price points go higher, such as golf and some other categories in Asia. As far as what’s driven growth, it’s been across the board. I’d say cycling has been a strong growth driver for four or five years and the company has some great partners in the sector.”
Boa generates approximately $100 million in revenue annually and $30 million in earnings before interest, taxes, depreciation and amortization (EBITDA). From 2017 to 2019, the company saw compound annual growth rates at an average of 18 percent. While its 2020 financial performance was negatively impacted by Covid-19, Boa is still tracking to be roughly flat in 2020 compared to 2019. Sabo said the pandemic hasn’t affected Boa’s supply chain.
Boa will continue to be led by CEO Shawn Neville and its current leadership team and maintain its headquarters and Performance Fit Lab in Denver. The company also has operations in Austria, China, Japan and South Korea and has a global team of more than 230 employees.
The acquisition is expected to close within the next 45 days, subject to customary closing conditions.
This is the second acquisition Compass Diversified has made this year, following its $200 million purchase of baseball equipment and apparel company Marucci March.