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BY Lisa R. Brown
(reprinted from the St. Louis Business Journal, SEP. 19, 2008)
Five years to the day from launching their FURminator pet products business at a trade show, Angie and David Porter sold the company after building it into an international marvel.
The couple sold a majority stake in FURminator Inc. on Sept. 10 to Indianapolis-based private equity fund Hammond, Kennedy, Whitney & Co. in a deal estimated to exceed $50 million. The Porters remain minority stakeholders, and the company will remain in Fenton.
FURminator, which makes pet shedding tools and other pet products, has catapulted into the growing market from its 15,000-square-foot facility in south St. Louis County. The company grew revenue from $700,701 in 2004 to $25 million in 2007, garnering it a spot on Inc. magazine's fastest-growing companies list. This year's sales are projected to top $35 million.
Angie Porter, who owned Groomingdale's, a pet grooming salon in South St. Louis, came up with the idea for a deshedding tool for dogs a decade ago. She and her husband, David, secured patents and came up with a business plan to start FURminator. The product removes loose undercoat hair on dogs and cats and retails for between $34 and $59.
"We always thought it would be big, but we didn't realize it would be this big," Angie Porter said.
At the company's first trade show appearance, the Groom Expo, in Hershey, Penn., in September 2003, FURminator brought in $30,000 in sales in three days. When the couple returned to St. Louis to make the first big deposit for their start-up, the influx of cash caught the attention of federal authorities. "We got a call from Homeland Security when we went to make the deposit," Angie Porter said. "They froze our assets for three days."
That hiccup well behind them, FURminator has grown both its product lines and its sales channels. The deshedding tool line remains its biggest seller. The company has 13 products, including a line of shampoos, dog treats and supplements, and it now markets products for dogs, cats and horses.
Both PetSmart and Petco carry FURminator products, and the television shopping network QVC markets its product lines in the United States and abroad.
As sales exploded, David Porter left his job as a marketing executive at Color Associates, and Angie sold her pet-grooming business last year to run the company full-time. The company now manufactures its pet grooming tools at multiple sites in China and all other products are manufactured domestically. FURminator has two distribution facilities in the St. Louis area, including its Fenton base, and a facility in Reno, Nev., to service the West Coast.
In May 2007, the Porters began exploring the idea of tapping into outside investment to grow the company. They approached Clayton-based The Fortune Group, a private capital advisory firm. Paul Schnoebelen III and John Hull of The Fortune Group worked on the deal.
HKW, which specializes in buy-outs of companies with revenue between $20 million and $100 million, has 17 investments in its portfolio. FURminator is HKW's eighth investment in its $202 million HKW Capital Partners III LP private equity fund, said HKW principal Luke Phenicie.
"We look for companies that have really strong, exceptional management teams that we can back, and we look for companies in growth markets," Phenicie said.
Phenicie said HKW sees growth potential for FURminator domestically and internationally. "There are 75 million dogs in the United States and 88 million cats," he said, "and the international market is three times the size of the U.S. market. Clearly, we believe the pet industry in general has a lot of potential."
Clayton-based Bush O'Donnell Capital Partners provided mezzanine financing through its debt and equity funds, Eagle Fund I and Eagle Fund II, for an estimated $10 million. CapitalSouth Partners, a Charlotte, N.C.-based private investment firm, co-invested with Bush O'Donnell.
"We have a lot of confidence in (FURminator's) management team and the quality ownership HKW brings," said Bush O'Donnell Partner Matt Koster.
For Angie Porter, the rapid rise and sale of the company has yet to sink in. "It feels surreal, unbelievable. We're still pinching ourselves."
Angie, who just turned 40, is stepping down as president and will serve as a consultant and continue in product development efforts. She said she's exploring some ideas for non-pet-related ventures outside of FURminator, but said she also plans to take some time off and travel.
David Porter, 48, formerly CEO at FURminator, has taken on the newly created title of chief visionary officer.
FURminator, based in a building the Porters own at 1638 Headland Drive in Fenton, has 24 employees. Tim Petsch, a former marketing strategist at Maritz and vice president of marketing and sales at FURminator since 2005, has been promoted to president. He'll run day-to-day operations.
Reprinted with permission from the St. Louis Business Journal,
©2008 all rights reserved.
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