by Maureen Flanagan
Stravina Operating Company, LLC, is the nation's leading designer and supplier of personalized novelty items and souvenirs. The Chatsworth, CA-based company manages more than 900 product lines, ranging from pens and pencils to key chains and albums. Its products are impulse-purchase novelty items, often personalized with the first names of girls and boys or localized with place names of popular tourist destinations. Stravina sells its products through a variety of channels, including major mass merchandisers as well as small, independent gift and souvenir shops.
On May 10, 2002, Blue Capital Management, LLC purchased Stravina from Impulse Holdings, a private company controlled by Milestone Partners. In support of the buyout, American Capital Strategies, Ltd. (Nasdaq: ACAS) provided financing of $19.5 million.
"American Capital's financing supports Stravina as it continues to expand its product lines and sell into more stores throughout North America," said Sheldon Morick, the company's President and CEO.
Founded in 1979 as a distributor of giftware products, Stravina narrowed its focus to the market for personalized items and laid a foundation for steady growth. In the mid-1990s, the company entered the Canadian market by establishing its Impulse! division in Ontario and acquired Fason, a souvenir products company. It also launched its Back-to-School and Christmas programs to take advantage of peak sales seasons. Recently, Stravina further expanded its souvenir division with several more acquisitions and entered the UK market through a distributor.
Stravina's personalized novelty products include pens, pencils, photo frames, albums, photo albums, rulers, Post-itTM Notes, party goods, jewelry and Christmas ornaments. The company's souvenir products, sold under the brand names of Fason, Funworks, Artistic Impressions and Bloom Brothers, include souvenir magnets, key chains, pottery and plush toys that are sold in gift shops in airports, hotels, national and theme parks and other tourist destinations.
The company excels at managing the supply of personalized products and, keeps the products new and fresh by releasing five to ten new or redesigned products every year. Products are displayed on attractive racks or in modular kiosks designed to appeal to its target market.
"Stravina offers customers a compelling value proposition which includes a broad product line, unique seasonal and year-round merchandising options, high velocity, and high margin products," said Jeri Harman, ACAS Managing Director & Principal. "The company is an excellent addition to American Capital's portfolio."
ACAS's $19.5 million financing consisted of senior subordinated debt and equity. Union Bank of California provided the senior financing. Crescent Private Capital also provided equity financing.
Since 1997, American Capital has invested over $1 billion in more than 60 companies in a wide array of industries.
Click here for more information about American Capital's portfolio companies.
Favorable market conditions augur well for Stravina's continued growth. The novelty products segment of the $20 billion giftware industry accounts for more than $8 billion of sales annually. The giftware industry has registered annual sales increases of 4.5% throughout the 1990s and growth is expected to continue at this rate.
Stravina is well-positioned for continued growth. All of its major mass retailer customers are committed to increasing the number of stores selling Stravina's products. The company's Back-to-School and Christmas programs are also slated to appear in more stores and a new spring program has successfully been rolled out with leading mass retailers. The company plans to expand into other top national retail stores as well and has begun testing specific markets. It also has acquisition opportunities that could yield significant operating synergies and cross-selling benefits.
