Confluence Holdings Corporation Business Information, Profile, and History
Easley, South Carolina 29642
Confluence Watersports today may be the industry's most influential c ompany. But our size does not undercut what we have always been: pass ionate outdoors enthusiasts who can't cross a bridge without checking the conditions of the water below, paddlers who can't sit through a meeting without daydreaming about favorite escapes, advocates who wan t to bring more people into this wonderful sport. Those values haven' t changed. Never will.
History of Confluence Holdings Corporation
Confluence Holdings Corporation, which trades as Confluence Waterspor ts Company, is one of the leading producers of canoes and kayaks in t he world. Confluence addresses various segments of the paddlesports m arket through its various brands: Wilderness Systems, Mad River Canoe , Voyageur, Wave Sport, Watermark, Perception, Dagger, and Mainstream . Formed from the amalgamation of numerous smaller companies around t he United States, the company has consolidated its manufacturing near Greenville, South Carolina, the home turf of industry builder Percep tion, Inc., which was considered the first to successfully sell rotom olded plastic kayaks.
Wilderness Systems Origins
Andy Zimmerman and John Sheppard formed kayak manufacturer Wilderness Systems, Inc., in 1986. According to Nation's Business, they had both worked at Casa Bique, a furniture business in High Point, No rth Carolina owned by Zimmerman's family but wanted to try their hand at something a little less pedestrian. They began in a shed in Zimme rman's backyard, making boats--and selling them--one at a time. The t wo managed sales of $160,000 the first year.
Ten years later, the company was Canoe & Kayak magazine's favorite kayak manufacturer, employing 100 people at a 60,000 square foot plant. Annual sales reached $10 million in the mid-1990s as the kayak industry experienced dramatic growth. In 1996, the governor of North Carolina pronounced it "Entrepreneurial Company of the Year ."
After beginning with fiberglass, or composite, kayaks, around 1992 Wi lderness Systems began using plastics to create inexpensive kayaks th at prompted many new users to take the plunge into paddlesports. In t he late 1990s, the company came out with a polyethylene plastic-hulle d trimaran for salt water sailing.
Confluence Formed in 1998
Wilderness Systems merged with Mad River Canoe in June 1998; Confluen ce Holdings Corporation was created as a holding company, while the t wo brands continued to operate as separate entities. Westbury Partner s of New York became its largest investor. American Capital Strategie s Ltd., a publicly traded buyout and mezzanine fund based in Maryland , began providing financing in September 1998; it later converted deb t to equity.
Mad River had been formed in Vermont in 1971 by Jim and Kay Henry and then employed about five dozen people. Mad River's high-end canoe bu siness complemented Wilderness Systems' kayaks. Mad River brought wit h it Voyager Ltd., a producer of paddles and accessories.
In the winter of 1999/2000, Mad River moved its administrative headqu arters to North Carolina. Wilderness was adding 30,000 square feet to its Trinity, North Carolina facility for a total of about 150,000 sq uare feet. Mad River's manufacturing operation, which employed 40 peo ple making 5,000 canoes a year, remained at two factories in Waitsfie ld, Vermont for another year or two. Wilderness invested $500,000 in the Vermont plants in an effort to turn them around.
Confluence acquired another kayak maker, Wave Sport, in 1999. Like ot her companies in its peer group, Wave Sport had been launched out of its founder's residence. Chan Zwanzig had started the business in the small town of Oak Creek, Colorado in 1987. Wave Sport specialized in stubby, maneuverable kayaks called "rodeo boats" intended for whitew ater. Confluence relocated its production to North Carolina. Wave Spo rt was making about 5,500 kayaks a year.
By 2000, Confluence was the world's third largest canoe and kayak man ufacturer, with annual sales of $30 million and 200 employees. It had a 200,000 square foot facility in Randolph County, North Carolin a, but the next year nearly doubled its space through an expansion. C onfluence's new CEO Bill Medlin told the Greensboro News & Rec ord the US kayak market, which sold 500,000 units a year, had ple nty of room to grow. However, by 2002 the company was cutting the num ber of employees from about 270 to less than 200 as sales stalled in a slowing economy. A debt burden from its merger was also a factor. T he Mad River plant in Vermont, which had been making about 35 percent of Confluence's total production of 10,000 boats a year, was closed. Savings were earmarked to develop new products.
By mid-2003, Confluence was hiring again and ramping up production to three shifts due to unprecedented demand. The company had already ta ken on yet another CEO, John Bergeron. Confluence was on its way to m aking 77,000 canoes during the year, up 28 percent from the previous year, Bergeron told the Greensboro News & Record. Independ ent stores accounted for three-quarters of sales.
Confluence Acquires Watermark in 2005
Confluence took a quantum leap forward by buying industry leader Wate rmark Paddlesports Inc. in 2005. American Capital invested another 36;19 million in Confluence Holdings to support the acquisition. This brought American Capital's total investment in Confluence to $61 million. Confluence also made a divestment during the year, selling its WindRider line of trimarans to the newly formed Windrider, LLC of Minnesota. Like Confluence, Watermark was itself an assemblage of a number of pioneering watersports companies, including Dagger, Percept ion, and Mainstream kayaks; Harmony accessories; and AT (Adventure Te chnology) paddles. It had been formed in Atlanta in the late 1990s.
Dagger Canoe Company was formed in 1988 by a group of four whitewater paddlers led by Joe Pulliam. By the mid-1990s, the fast growing ente rprise had about 60 employees and was expanding its Midtown, Tennesse e, facilities for a second time, to more than 50,000 square feet. Its product line of two dozen plastic watercraft was distributed as far as Europe, Australia, and Japan. Towards the end of 1994, Dagger acqu ired Maryland's Valley Mill Boats, the leading producer of advanced w hitewater racing boats using advanced composites technology. It had b een formed by whitewater canoeing champion Andy Bridge.
Dagger itself was acquired by Watermark in 1998. Its founder, Joe Pul liam, remained president. Watermark had also acquired Perception, Inc ., one of Dagger's main rivals. Perception, based in Easley, South Ca rolina, had been formed in the early 1970s by Bill Masters, who had w orked summers as a river guide while studying at nearby Clemson Unive rsity. He began making his own kayaks while still a student, beginnin g with a $50 investment in supplies.
Perception was credited with expanding the kayaking market by pioneer ing the production of low-cost, rotational molded plastic kayaks in 1 977. In 1984, he started another company, Aquaterra, to produce touri ng kayaks, but this was eventually merged into Perception, Inc. Maste rs received a number of accolades for his entrepreneurship and innova tion. Jim Clark became Perception's president after it was acquired b y Watermark, while founder Bill Masters remained on board as an advis or. At the time, Perception was selling 50,000 boats a year.
In 2001, most of Dagger's business was relocated to Watermark Inc.'s facility in Easley, South Carolina (a small composite manufacturing o peration remained in Tennessee). By this time, Watermark had added Is lander sit-on-top kayaks and Mainstream, a value-priced line, to its holdings.
Watermark also diversified, acquiring the Yakima and Rhode Gear brand s of vehicle racks for bicycles, skis, and other recreational equipme nt, including kayaks. Yakima, then based in San Diego, California, ha d once supplied Perception with kayak hardware.
Another couple businesses were acquired in 2001: snowshoe manufacture r SnoWalkers and the Sospenders floatation device. Watermark in the f ollowing two years to bring its disparate brands together. In the pro cess, 18 of its 450 US employees were let go. An executive told Bi cycle Retailer the company was concerned with streamlining operat ions in an uncertain economy. At the same time, its Perception brand was bringing its revolutionary new Airalite technology to the market. It offered composite-type performance with the durability of plastic s.
The brands were divided into Watermark Boat and Watermark Gear. After its boat business was acquired by Confluence in 2005, Watermark relo cated the rest of its operations from California to Oregon; the compa ny was then renamed Yakima Products, Inc.
The merger of Confluence and Watermark's paddlesports unit in 2005 fo rmed probably the largest producer of canoes and kayaks in the world. Its closest rival was the watercraft business of Johnson Outdoor, In c., which included Old Towne Canoe Company and a handful of other bra nds.
Principal Subsidiaries: Confluence Watersports Canada, Inc.
Principal Divisions: AT Paddles; Dagger; Harmony; Mad River Ca noe; Mainstream; Perception; Wave Sport; Wilderness Systems.
Principal Competitors: Johnson Outdoors Inc.
- Key Dates:
- 1977: Bill Masters of SC's Perception, Inc., applies rotationa l molding technique to kayak production.
- 1971: Jim and Kay Henry launch Vermont's Mad River Canoe.
- 1986: Andy Zimmerman and John Sheppard form Wilderness Systems to make kayaks in High Point, North Carolina.
- 1988: Dagger Canoe Company is formed by Joe Pulliam in Tenness ee.
- 1998: Wilderness Systems merges with Mad River Canoe, renamed as Confluence Watersports Company; Watermark formed, acquires Dagger, Perception brands.
- 1999: Confluence acquires Colorado's Wave Sport.
- 2000: Confluence is world's third largest canoe and kayak manu facturer with sales exceeding $30 million.
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