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SOLO BRANDS CASE STUDY
Guiding Solo Brands through a successful IPO – and beyond
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Introduction
Through a combination of organic growth and key acquisitions, Solo experienced explosive growth in a short amount of time, making an IPO the next logical move. But with a tight timeline and a lean internal finance team, achieving their public listing goals seemed daunting, so they turned to Embark's team of IPO and accounting specialists for help...
Our Solutions
Embark's flexible team stepped up to the challenge, providing support across its M&A Activity, Capital Markets, and PE/VC Investment solutions to help Solo Brands meet its goals—and more.
Index
The “Big Wins”
1. By coordinating several of its practices, Embark flexed and scaled as needed throughout the engagement
2. Embark is providing financial reporting resources & expertise as the client builds out its accounting function and refines existing processes
Our clients are happy.
We’re happy.
Everybody’s happy.
Embark's ability to flex and scale to our needs was instrumental to our recent IPO success, particularly with several pre-IPO acquisitions involved. Throughout the process, Embark's teams exhibited levels of specialized expertise and hospitality that are both rare and elite.
Sam Simmons, Former Chief Financial Officer of Solo Brands
Executive summary
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 accounting. Ultimately, Solo Brands’ multi-faceted engagement with Embark proved to be essential during the company’s IPO journey.
About Solo Brands
Solo Brands has roots going back to 2011, when two brothers founded the Solo Stove brand in an attempt to combine their biggest passions – the great outdoors and e-commerce. The company found early success by selling revolutionary backpacking and camping equipment using a direct-to-consumer (DTC) model.
Now composed of four distinct outdoor brands within the newly-christened Solo Brand portfolio – Solo Stove, outdoor apparel company Chubbies, Oru Kayak, and paddleboard company ISLE – Solo Brands focuses on providing high-quality outdoor lifestyle products that deliver value to customers.
Challenges & objectives
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 expertise 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 facilitating the audit
- Assisting with S-1 preparation
Financial & Valuation Services
- Providing valuation services and purchase price accounting 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 accounting 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 accounting 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.
Related resources
The Early Prep IPO Readiness Guide
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Going Public: The Pre-IPO Timeline
From six months out to the moment you ring the bell – and beyond, Embark walks you through every essential stage of the pre-IPO process. Our timeline explains what you need to do and, just as importantly, when you need to do it.
IT Due Diligence Checklist
Embark’s IT Due Diligence Checklist is a practical tool forged from real-world insights and genuine M&A expertise. It will help you identify and prioritize potential IT risks, estimate costs, and spot any systems, data, or staffing gaps, all to help you develop a comprehensive IT integration roadmap.
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