In Q&A, firm executives explain opportunities for growth with Pelican’s durable, well-received protective cases

In a recent Forbes article, the rugged Pelican Cargo Case Collection was named one of the top accessories from the 2021 Overland Expo Mountain West show.

The review was complimentary of Pelican cargo cases, which are inspired by the company’s military cases and are tailored to the overlanding crowd. Designed to securely mount and quickly release from vehicles, the cases are adaptable to different mounting methods and designed to limit vibrations and fight wind resistance.
The article serves as reminder of the reputation Pelican Products has developed among consumers since the company was founded in 1976.

Shortly after Platinum Equity agreed to purchase Pelican from Behrman Capital, Partner Jacob Kotzubei got an inkling.

“After we signed this deal, we had a number of inbounds congratulating us on the transaction,” Kotzubei said recently. “They were users of the product and appreciate the reliability, the durability, the efficacy of the protection that Pelican offers.

“One of our objectives is to really help the company expand its product awareness much, much more broadly.”
Pelican’s main business is its well-designed protective cases which protect high-value assets like medical equipment, cellphones, expensive photographic equipment or equipment needed for a much-anticipated outdoor excursion. The company also manufactures advanced portable lighting systems and outdoor consumer products for government, commercial and consumer markets. Peli BioThermal provides passive temperature-controlled parcel solutions for high-growth clinical trials and commercial biopharma markets. The company is instrumental in the COVID-19 fight with ventilator protection and vaccine cold storage.

Based in Torrance, Calif., Pelican maintains 11 manufacturing sites, 19 service centers and network stations, and 23 international sales offices across 25 countries.

Pelican is a new space for Platinum.

Kotzubei and Managing Director Matthew Louie spoke recently on the transaction to further explain the reasoning behind the acquisition.

(Questions and answers have been edited for clarity)
PE: How do consumers interact with Pelican Products?
Louie: Now that we own the business, Jacob and I are constantly texting each other pictures of Pelican products. We see them all over the place, we just never recognized them in the past. I think it’s reflective of the stat that 70% of folks don’t know about Pelican products, but of the 30% who do know, love the product and are loyal customers.
Louie: We believe the brand is synonymous with durability, safety and superior product performance and innovation. In our view, it’s the gold standard of the protective case industry and that’s solidified and supported by a strong brand equity. About 70% of all protective case related mentions on social media are associated with Pelican. And the product return rate is low, it’s less than 1% of sales.
Louie: When consumers get to know the products, they love them, and that allows for loyal and high repeat purchases from customers, creating a more predictable revenue stream because once a potential enthusiast uses a Pelican product, the photography equipment or the video camera or drone or whatever equipment they use, they realize how great the products are and they just keep coming back.

PE: Is there anything specific about the product that makes it better than similar products?
Louie: The products are designed for rugged environments. It’s purposefully designed and highly customizable to what you are placing in the case for maximum protection. If you have a particular camera, or a particular piece of lighting equipment or high-value military equipment or another high-value asset, you’re able to customize it exactly right for your product.

PE: Was there another factor that made it attractive?
Kotzubei: We’re looking for businesses that can demonstrate significant recession resiliency, and that was a really big factor as we were learning about this business. The performance during the pandemic and the major recession in 2007-09 was one factor in the decision.
Kotzubei: It’s penetrated very well into clinical trials around medicine that needs temperature control. COVID-19 vaccines happen to be one of those things with Pfizer and Moderna, and certainly other products as well. And we see a great growth engine there as healthcare customers want more temperature-controlled products.

PE: Why was Pelican available? How was it sourced?
Kotzubei: We were chasing this for a long time, and I would say it was not available. All of us really worked hard to present ourselves as an attractive next owner for this company, starting with the management team and from the management team to the owner, who’d owned this business for a long time and wasn’t under any pressure to sell.
Kotzubei: We did a good job of becoming the emotional favorite for being the next owner and presenting ourselves in a very customized way as the right next owner. In the case of this business, somebody who would really invest in direct-to-consumer improvement, invest in product innovation, invest in growth of the Peli Bio-Thermal business. It was a multiyear effort.
Louie: Typically, when a sponsor holds a business for a long time period, they haven’t done well, but with respect to Pelican, the sponsor had done nicely. We didn’t know when they were going to do something formally, and we tried to buy the business a couple years earlier.

PE: Anything else that makes it a Platinum deal?
Louie: It’s a leading player in protection solutions in a highly fragmented global market. There are also high barriers to entry with a significant upfront investment required to get into the space, particularly around the machining and tooling equipment. There are also meaningful and stringent pharma qualifications to scale and compete in the biopharma space. Then you have Pelican’s global manufacturing and distribution footprint with robust relationships with distribution partners at the local levels, which is critical for sales. You also have an entrenched, diversified customer base.
Louie: On the biopharma side, this is a market that is growing at a rapid pace.  The market is supported by multi-trillion, global pharmaceutical markets, and we are at the epicenter of the market. On top of all that, you have strong cash flows and a solid margin story, with an experienced team.

PE: Is there an ESG story here?
Louie: I think there’s a powerful one, particularly around the biopharma side; if you think about what we are doing in the healthcare sector, how we are helping patients and making pharmaceuticals more readily available to populations that really need them, whether it’s through clinical trials, logistics or on the commercialization side, biopharma is an area that’s not only growing, but just has strong ESG themes all around it.

PE: Anything else about the operational plan?
Kotzubei: Like with every portfolio company, we work closely with business development on helping them understand what our goals are from an add-on point of view and working closely with them globally to source those add-ons. There is a lot for us to do operationally, both in terms of capital investment, but also intellectual investment in terms of new product innovation, more efficient manufacturing, and enhancing the go-to market effort.


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