Taking Companies Public



Holley Performance Products, Inc.



Taking a Company Public

Company: Holley Performance Products, Inc.

Position: Consumer

Location: Bowling Green, Kentucky

Date of Investment: July 2015

Exit Date: July 2021

Company Description
Holley is the leading designer, manufacturer, and marketer of specialty high-performance aftermarket products for car and truck enthusiasts. Holley's product portfolio includes fuel injection systems, engine tuning and ignition solutions, electronics, carburetors, and driveline and exhaust systems. Holley sells its products under iconic brand names such as Holley, Sniper EFI, MSD, Accel, Diablosport, Superchips, Edge, Flowmaster, B&M, Hurst, APR, Dinan, Simpson, Drake, Detroit Speed, and AEM. Each brand is targeted to specific consumers across the late-model, classic, truck and jeep, and racing vehicle sub-segments. Holley sells through online specialty retailers, warehouse distributors, traditional auto parts retailers, and directly to consumers via its own e-commerce platform. Holley has a committed and loyal customer base of devoted automotive enthusiasts

After considering several investment opportunities in the fragmented enthusiast automotive market, in 2015, we acquired Driven Performance Brands ("Driven"), a small, focused platform that owned four strong brands. After growing Driven organically and through a small add-on acquisition, in 2018, we were presented with an opportunity to purchase Holley. Following a competitive sale process, Sentinel acquired Holley and simultaneously merged Holley and Driven. The transaction was transformative and created the largest player in the performance aftermarket with best-in-class new product development and an unmatched product and brand portfolio.

After successfully integrating Holley and Driven, the combined company took the Holley name and completed nine additional add-on acquisitions. With our investment thesis playing out well, Holley had cemented its position as the leading consolidator in its growing and fragmented industry.

The Opportunity
Having created the largest and most diverse platform in the performance aftermarket with the #1 or #2 market positions across several core product categories and a growing and powerful direct-to-consumer ("DTC") online sales channel, Sentinel sought permanent equity capital for Holley to enable it to further consolidate its market. Sentinel saw an opportunity to take Holley public, which would provide such permanent capital and also offer existing investors a path to liquidity, as well as further upside appreciation potential through public stock ownership

Successful Combination of Holley and Driven: The successful combination of Holley and Driven generated powerful cross-selling opportunities, significant market share gains, and cost savings from operational synergies.

Strengthened Leadership Position: Holley completed nine additional add-on acquisitions and rapidly grew its DTC channel to nearly 15% of sales in 2020 with a four-year CAGR of more than 40%.

Executed Successful IPO: Holley merged with a consumer-focused SPAC led by a team with public market expertise and deep experience growing consumer products companies as the path to going public. Sentinel sourced and negotiated the transaction, helped Holley raise a $240 million PIPE in a challenging market, hired three senior executives to help elevate Holley's public company capabilities, and added three new, highly qualified independent board members.

Under Sentinel’s ownership, Holley has greatly accelerated its growth trajectory, added numerous high-profile brands to its portfolio, established itself as the leader in the performance automotive aftermarket, and built a strong foundation as a public company. Holley now trades on the NYSE under the HLLY ticker.

Case studies have been selected for illustrative purposes for management teams of midmarket companies considering a partnership with Sentinel and should not be considered an offer or solicitation of services or an actual or implied endorsement of Sentinel or any security, investment, or portfolio company. The portfolio companies highlighted are not representative of all current and prior investments of Sentinel. A list and description of investments since Sentinel's inception is available on this website.