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Transactions

October 2013
Port Washington, New York
has acquired
Boulder, Colorado


Background

NPD Group, headquartered in Port Washington, NY, with offices across the US, Asia, the United Kingdom, Europe, and Australia, is one of the world’s leading market research companies. The company collects and analyzes data from thousands of retail distributors, consumer panels and tracking services in order to provide actionable data that allows marketers to make better informed decisions. One area in which NPD has been historically challenged was data on sporting goods.

Leisure Trends Group LLC based in Boulder Colorado, is a leading market research company focused on sporting goods and outdoor recreation.

In November 2012, NPD asked M&A to approach LTG and assess their interest in being acquired by NPD.



Overview

Initially, M&A reached out to LTG’s CEO who referred the inquiry to LTG’s principal owner, the widow of LTG’s founder. After a series of conversations, the owner engaged a local investment banker. Discussions progressed slowly over many months. NPD personnel invited key LTG personnel to visit them in New York and NPD Principals visited the company in Boulder. Eventually NPD and LTG agreed to explore how the two companies could work together. After several months, the companies agreed on a price range and entered into an exclusive dealing period.  

While NPD conducted its detailed due diligence reviews of LTG’s operational strengths and weaknesses, and financial results, M&A worked with NPD and LTG’s banker to negotiate transaction terms. Many issues arose. Among others, the company had granted a right of first refusal to a major vendor which had to be waived; consent from a major client was required before a transaction could take place; the company’s financial statements were oriented to paying taxes and were neither audited nor compiled in accordance with GAAP; software licenses had to be obtained before a transaction could take place; unexpected issues arose about taxes; and key employees had to be negotiated with. At a crucial juncture, the LTG CEO gave notice of his intention to accept another job offer.  

In October 2013, 11 months after M&A was engaged, NPD acquired 100% of the assets of LTG and combined LTG with NPD’s Sports Practice. The new Leisure Trends entity will remain in Boulder and continue to be led by the LTG Management team. At the same time, NPD will bring them enhanced data processing, infrastructure and operational scope, data and clients in order to better provide expanded breadth and depth of information while delivering reports faster to more clients.

M&A Role

Marlin & Associates initiated the transaction, assisted in the due diligence reviews, coordinated negotiations (seeking and finding resolution for deal-related issues) and acted as exclusive strategic and financial advisor to NPD Group.

Press

The NPD Group to Acquire Leisure Trends Retail Sales Tracking and Consumer Research for Sports and Recreation; New Business Will Offer Broad Channel Coverage Plus Deep Consumer Insight

October 15, 2013

New Business Will Offer Broad Channel Coverage Plus Deep Consumer Insight

BOULDER, CO, October 15, 2013 – The NPD Group, Inc., a global information company, has signed an agreement to acquire the retail sales tracking and consumer research businesses of Leisure Trends, the Boulder, CO-based leader in market research for the sports and recreation industries.

The combined businesses will provide the most comprehensive sales information available to the sports and recreation industries. Together Leisure Trends and NPD collect sales data from over 26,000 doors spanning all industry channels of distribution, including Sporting Goods, Specialty Stores, Department Stores, Mass Merchants, and eCommerce. Specialty Store coverage encompasses Outdoor, Snow Sports, Cycling, Running, and Independent Footwear stores. This data collection footprint gives the combined company the broadest, most comprehensive look at retail sales available in the sports industry.

The new business will also offer proprietary online panels with access to over 2 million individuals for insight into consumer behavior, preferences, and purchase drivers. The Most Active Americans PanelTM (MAAPTM) is a quantitative panel of early adopters who can help predict trends in the broader sports market. The Core Athlete Outdoor Enthusiast Panel offers access to individuals who participate in specific activities or sports for targeted research.

“Combining our complementary strengths will give us a new business greater than the sum of the parts,” said Dennis Brown, Group President, Americas Commercial Business for NPD.   “Leisure Trends has deep ties in the industry, with strong retail partnerships and access to the ‘alpha consumer’. As we integrate our businesses, we will be able to offer new solutions for our clients as well as establish a strong platform for international growth.”

Jim Kelley has been named President of Leisure Trends, An NPD Group Company. He will work closely with Mike Kuhl, President of NPD’s Sports practice, on integration plans. Charlie Cooper, formerly President of Leisure Trends, will remain working with NPD through year end. All three will report to Dennis Brown.

“As a global leader in market research, NPD has the data processing infrastructure and operational scope to address the growing needs of the Sports and Recreation industries,” said Kelley. “Together, we look forward to expanding our breadth and depth of information, while also improving efficiency, including faster data delivery, which we know is critical for our clients.”

The transaction is expected to close on or before October 31, 2013.

Note: The NPD Group, Inc. acquisition does not include Leisure Trends’ Customer Relationship Management (CRM) business. This business is being spun off as a separate company called Ascent CRM. This new company will be headed by Scott Buelter and will continue to service Leisure Trends’ existing CRM clients and contracts.

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