Overview

After experiencing exponential growth in recent years, a PE firm purchased a controlling interest in Solo Stove in 2019. Just a year later, another PE firm purchased the controlling interest of the company.

As the company continued to grow, management identified the need to upscale the financial statements to prepare for a variety of potential next steps. Initially, the company engaged Embark to help get the financials up to GAAP and SEC standards in anticipation of their first PCAOB audit. In the meantime, the company acquired three other outdoor lifestyle brands to strengthen its direct-to-consumer business model.

Embark assisted with a range of pre-IPO and acquisition-related roles and tasks, including everything from drafting components of the S-1 and financial statement preparation to valuations and purchase price allocation advisory. Ultimately, Solo Brands’ multi-faceted engagement with Embark proved to be essential during the company’s IPO journey.

The big wins

Client challenges

Management identified several areas the company had to address to prepare for a potential IPO and satisfy the requirements of becoming a public entity. Unfortunately, the company didn’t have a long time horizon for preparation, nor the headcount and expertise in its in-house finance and accounting team to independently navigate the complex pre-IPO process. Three key acquisitions during the company’s IPO preparation only further stretched its time, attention, and resources.

Leadership engaged Embark with a specific set of objectives in mind, all in preparation for its IPO and successfully integrating the three acquisitions:

• Produce GAAP and SEC-compliant financials
• Act as a liaison between management and the auditor
• Lead the drafting of the financial components for the SEC registration process
• Provide valuations and acquisition support for the transactions

How Embark helped

Compliance & Regulatory Support

• Assisting with and establishing a solid foundation for SEC reporting, including process and technology improvement

• Ensuring segment reporting met SEC regulations

• Preparing for and supporting the audit

• Assisting with S-1 preparation

Financial & Valuation Services

• Providing valuation services and purchase price allocation advisory for each of the three acquisitions

• Generating a valuation for incentive units the company had issued

• Writing several technical memos to provide the auditor regarding the company’s reporting position on complex areas

• Providing financial reporting support as Solo Brands expands its in-house team

Results: a successful IPO and a bright future

Embark played an essential role in Solo Brands’ successful IPO by providing different services as needed, including financial advisory, audit preparation, capital markets, and transaction advisory services. Post-IPO, Embark is integrating Workiva to further improve the company’s reporting speed, accuracy, and efficiency.

As an emerging growth company (EGC), management is also looking to Embark for future SOX compliance and process improvement needs. Therefore, Embark has proven to be an invaluable partner before, during, and after Solo Brands’ IPO, building a relationship that will expand in lock-step with the company’s growth.