Going Public
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 subsegments. Holley sells through online specialty retailers, warehouse distributors, traditional auto parts retailers, and directly to consumers via its own ecommerce platform. Holley has a committed and loyal customer base of devoted automotive enthusiasts.
Background
After considering several investment opportunities in the enthusiast automotive market, in 2015, we acquired Driven Performance Brands, a small, focused platform that owned four strong brands. We helped Driven grow organically and through a small add-on acquisition. In 2018, we were presented with an opportunity to invest in Holley, which Sentinel subsequently acquired through a competitive sale process and simultaneously merged with Driven. The transformative transaction created the largest player in the performance aftermarket with best-in-class new product development and an unmatched product and brand portfolio. The integration of Holley and Driven went smoothly, and the combined company took the Holley name. Holley, with its position as the largest consolidator in its growing and fragmented industry cemented, then completed nine more add-ons.
Opportunity
By 2021, Holly claimed #1 or #2 positions across several core product categories, had a growing and powerful direct-to-consumer (“DTC”) online sales channel, and was the performance aftermarket’s largest, most diverse platform. Sentinel saw an opportunity to take Holley public, which would raise permanent equity capital to fund acquisitions, offer existing investors a path to liquidity, and provide further upside potential through public stock ownership.
Accomplishments
Successful Combination of Holley and Driven: The Holley-Driven combination generated powerful cross-selling opportunities, significant market share gains, and cost savings from operational synergies.
Strengthened Leadership Position: Holley made nine additional add-ons 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: As the path to going public, Holley merged with a consumer-focused SPAC led by a team with public market expertise and deep experience growing consumer products companies. Sentinel sourced and negotiated the transaction, helped Holley raise a $240 million PIPE in a challenging market, hired three senior executives to elevate Holley’s public company capabilities, and added three highly qualified independent board members.
Outcome
Under Sentinel’s ownership, Holley has greatly accelerated its growth trajectory, added high-profile brands, 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.