There is little doubt that Richard Heckman intends to turn K2 into an industry giant by gobbling up other companies, perhaps yours. Heckman is not a man to wait and watch, and he has the talent and, apparently, pockets deep enough to get bullish quickly. The new CEO and chairman of K2 has made it clear that he intends to turn K2, a company that reported a $7.7 million loss on $595 million in sales last year, into a Fortune 500 powerhouse.
"There is not a major financial institution in this country that has not contacted me to offer us whatever we want," Heckman (59) told a gathering of journalists during a Jan. 28 early-morning question and answer session. "It is our intent to lead the consolidation that is going on in the sporting goods industry, and we have the financial wherewithal to complete any transaction at any time."
Heckman knows something about acquisitions. As the CEO of USFilter, he led the company through 260 acquisitions in just over five years, turning the filter company from a $17 million nobody into a $5.5 billion bully that could kick sand in the face of any competitor. Heckman sold that company to Vivendi, a French utility corporation, for $6.2 billion and pocketed $120 million for himself.
While Heckman likened K2's potential for influence and size to that of Nike in the course of his company overview, he quickly bristled when SNEWS sought clarification on that comment and, in the course of our question, apparently likened Nike's corporate structure a bit too closely to K2's.
"We are a company of brands and NOT a branded company. We bring authenticity to the brands that we own, and that is a huge difference between us and Nike," said Heckman.
Heckman said that K2's acquisition targets would focus only on those companies that fit within the current distribution model of the company and would serve to bolster the brands already owned by K2. When questioned, he noted that golf and tennis were not areas K2 was seeking to expand -- for now.
SNEWS noted that Dana Designs was the lone outdoor company in the K2 portfolio. We then asked Heckman if K2 was eyeing acquisitions in the outdoor marketplace that could be completed within the year that would serve to strengthen Dana and increase K2's influence in the market. His answer? "Yes!"
SNEWS View: While it is true that consolidation is going on in the outdoor, ski and sports marketplace, we think Heckman will have a bit more difficulty completing his growth model in this industry. Why? For starters, this is not exactly a growth market right now. Growing a filter company where you have one product for one purpose is one thing. Seeking the growth Heckman desires by combining numerous product categories that each represent a complete and utterly unrelated business, each with its own set of business patterns, unique products and unique selling requirements, will be quite the challenge. Of course, Heckman might know something we don't, and if so, we'll just sit back and marvel while he feeds and grows.