HOME FURNISHING DEMAND RISES AMID PANDEMIC...The Furniture & Home Furnishing subsegment has comprised the largest percentage of transactions with 28 deals, followed by Lawn & Garden

3

December 2020

KEY HIGHLIGHTS

• The Home Goods industry suffered from early

headwinds but has bounced back strong

• Digital companies have demonstrated the most

resilience amid the pandemic

• M&A activity has slowed but strategic buyers

remain active

• Capstone expects M&A activity to increase in 2021,

presenting a favorable opportunity for home

goods providers to come to market as strategics

look to bolster offerings and private equity buyers

seek to build out their sector portfolios

HOME FURNISHING DEMAND RISES AMID PANDEMIC

HOME GOODS UPDATE | DECEMBER 2020

CONTACTS

Lisa Tolliver

Senior Director

Kenneth Wasik

Managing Director,

Head of Consumer & Retail

CONTACTS

Lisa Tolliver

Senior Director

773-791-9493

[email protected]

Kenneth Wasik

Managing Director,

Head of Consumer & Retail

917-434-6124

[email protected]

Following substantial headwinds during the onset of the pandemic, the Home

Goods industry has demonstrated a remarkable recovery driven by consumers’

heightened focus on home furnishings and improvement amid increased time

at home. Quarantine restrictions and work from home trends are fueling

home goods spending and investors are showing increased attraction to the

sector. Capstone expects merger and acquisition (M&A) activity to accelerate

for quality home goods companies with established online channels, strong

brand recognition, and differentiated business models. Strategic buyers

remain active and private equity firms are shifting from crisis management of

portfolio companies to actively pursuing platform and add-on investments.

The acceleration of e-commerce adoption has been apparent, evidenced by

leading online home furnishings retailer Wayfair’s (NYSE:W) 83.7% year-over-

year (YOY) revenue increase,1 and kitchenware provider Williams-Sonoma’s

(NYSE:WSM) Q2 e-commerce sales accounting for nearly 76% of total

revenues.2 In addition, Casper (NYSE:CSPR), which leverages retail

partnerships with Costco (Nasdaq:COST), Target (NYSE:TGT), and Amazon

(Nasdaq:AMZN), was able to drive strong sales gains in Q2, with revenue from

retail partnerships increasing 61% from the prior year, according to its

earnings release.3

Public companies in the Home Goods industry experienced significant stock

performance declines in the first half of the year but have recovered to

produce positive returns in recent months. Home goods retailers have led all

subsegments, (+64.7%) while lawn & garden (+37.2%) public companies have

emerged as a bright spot and shown resilience throughout the pandemic.

TABLE OF CONTENTS

Industry Outlook

COVID-19 Impacts

M&A Overview

Notable Transactions

Select Transactions

Public Company Data

Key Takeaways

Firm Track Record

INDUSTRY OUTLOOK

2

Home Goods

Home Furnishing Demand Rises Amid Pandemic

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Capstone Public Company Index Returns

Note: List of companies on pages 7-8

Source: Capital IQ and Capstone Research

-100%

-50%

0%

50%

100%

Dec-19 Feb-20 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20

Furniture & Home Furnishing Household Products

Lawn & Garden Home Goods Retailers

COVID-19 IMPACTS: MATTRESS & BEDDING

3

COVID-19 severely challenged the retail environment in

the first half of 2020 with sales falling nearly 15% (Census

Bureau4) at peak disruption in April. In addition, Home

Goods providers concentrated in physical retail stores

experienced substantial headwinds, evidenced by the

bankruptcies of Pier 1 Imports, Art Van Furniture, and Sur

La Table. However, with consumers spending an increasing

amount of time in their homes and prioritizing home

improvement and furnishing, industry demand has

rebounded significantly. While in-store retailers have

struggled with closures and social distancing protocols,

digitally native brands and direct-to-consumer providers

with differentiated products and resilient supply chains

have experienced heightened sales growth.

Mattress and bedding providers have experienced strong

demand in recent months, especially those that have

invested in online channels and brand development.

Following significant disruption at the onset of the

pandemic, the sector has rebounded immensely, with

Capstone’s Mattress & Bedding public company index

returning nearly 19% as of October 19th, outpacing the

S&P 500. Notably, online mattress provider Purple

Innovation (Nasdaq:PRPL) recorded a 60.3% YOY revenue

increase in Q2, with direct-to-consumer revenue rising

127.9%, according to its earnings release.5 In addition,

Casper experienced a 15.7% YOY revenue increase, despite

recording modest sales in its retail stores, highlighting the

effectiveness of robust e-commerce channels.

Comprehensive digital capabilities have proved to be

critical to operational resilience and industry participants

are increasingly leveraging data and media solutions to

bolster digital traffic. Notably, home goods & décor e-

commerce sales increased 88% YOY in September,

according to Signifyd.6 Leading mattress provider, Sleep

Number (Nasdaq:SNBR) has accelerated its digital

capabilities in the wake of the pandemic, with digital traffic

already surpassing 2019 totals in Q3, according to its most

recent earnings call.7 It has utilized automation, machine

learning, and proprietary data to increase conversion of

elevated consumer demand. “Consumers are prioritizing

Lisa Tolliver, Senior Director

“With an active client in the Soft Home Goods sector, we are front and center regardingdiscussions with leading industry players and private equity groups interested in this growingsector. The Home Goods industry is experiencing strong momentum, particularly for businessesselling via online channels, whether through their own websites or major etailers such asAmazon, Wayfair, Target.com, etc. Consumers are shopping online and keenly focused onnesting and making their homes more comfortable, trends that are expected to continue long-term post pandemic.”

Home Goods | December 2020

their home as well as their own well-being. They

understand the strong connection between sleep and

overall health and wellness. Consumers are also adapting

digital products and service at a much faster and higher

rate,” commented Shelly Ibach, Sleep Number CEO,

President & Executive Director.

While the Mattress & Bedding subsegment has

experienced heightened demand, capacity constraints

have challenged top providers. Tempur Sealy (NYSE:TPX)

which combated significant supply chain issues through

Q2, especially in its U.S. Sealy products, struggled to meet

demand and experienced a YOY revenue decline of nearly

8%, according to its earnings release.8 However,

improving order trends on its U.S. Tempur-Pedic products

have led to optimism for Q3 sales growth, which the

company expects to increase over 30% from the prior

year, according to a press release.9 In addition, despite

Purple Innovation’s strong Q2 performance, many orders

placed in Q2 were not recognized as quarterly revenue

due to capacity limitations and an extensive backlog.

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Oct-19 Dec-19 Feb-20 Apr-20 Jun-20 Aug-20 Oct-20

Mattress & Bedding Index S&P 500

Mattress & Bedding Performance

Note: Index includes SNBR, CSPR, PRPL, TPX

Source: Capital IQ and Capstone Research

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M&A OVERVIEW

M&A activity through year-to-date (YTD) 2020 has trailed

2019 transaction volume by 32% as many strategics

paused acquisitions and private equity focused on the

health of existing investments. However, volume has

surged in YTD Q4 with 22 deals announced or completed,

increasing 175% from the prior quarter and slightly

outpacing YOY levels. In addition, total disclosed deal

value has amounted to over $1.6 billion, modestly

exceeding 2019 YTD totals. The resurgence in transaction

volume follows two quarters of depressed deal activity,

with Q2 and Q3 recording YOY declines of 43% and 72%,

respectively. The significant increase in M&A interest

through YTD Q4 supports robust optimism for the Home

Goods sector as buyers leverage greater financial visibility

to reengage in inorganic growth strategies.

The Furniture & Home Furnishing subsegment has

comprised the largest percentage of transactions with 28

deals, followed by Lawn & Garden with 11 transactions.

Top lawn & garden players have showcased robust

performance, benefiting from at-home trends. Notably,

Scotts Miracle-Gro (NYSE:SMG) recorded a 27.5% YOY

increase in Q2 revenue and cited increased prospective

M&A opportunities in recent months, according to its

earnings call.10 Most recently, Scotts acquired a 19.5%

stake in AeroGrow International (OTCPK:AERO) for $20.1

million in October. While public companies have not

been active acquirers through YTD 2020, accounting for

only 9% of transactions, they have utilized M&A to divest

non-core businesses in order to improve liquidity and

narrow product focus. Notably, Bed Bath & Beyond

(Nasdaq:BBBY) sold three businesses in the Home Goods

sector this year, most recently selling Christmas Tree

Shops to Handil Holdings (see next page). The sale

follows

4


“Overall M&A activity has been down compared to last year due to the pandemic. However,there are some bright pockets of strong M&A activity for businesses that are benefitting from thesurge in demand in online shopping and changing consumer behaviors. Strategics have beenactive, accounting for nearly 70% of transactions year-to-date. However, we are seeing stronginterest from private equity groups focused on the long-term outlook of the Home Goods sectorand searching for opportunities to build a home goods focused portfolio. In particular, we areseeing renewed interest in sectors such as Furniture, Home Office Furnishings, Bedding, Bath andKitchen items, Garden and Outdoor decor, in addition to gift related decor and accessories.”

Nu

mb

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of

Tra

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M&A Transaction Volume

follows the divestitures of e-commerce home furnishing

provider One Kings Lane (April, undisclosed) and

PersonalizationMall (February, $252 million), an online gift

and home products company.

Private equity has demonstrated robust appetite in the

Home Goods sector through the pandemic, accounting

for 30% of total deals, slightly above 2019 levels. PE firms

have largely acted through add-on acquisitions to bolster

and diversify existing portfolio companies, which

comprised nearly 18% of total transactions in the YTD.

This has been evidenced by HCI Equity Partners-backed

Wellborn Forests acquisition of De Pere Cabinet

(September, undisclosed), a provider of semi-custom

kitchen cabinets primarily for single-family residences.

Capstone expects continued private equity interest in

2021 for targets demonstrating robust growth.

Note: Year-to-date ended December 4

Source: Capital IQ, FactSet, PitchBook, and Capstone Research


26

21

29

2124

128

22

0

10

20

30

40

50

Q1 Q2 Q3 YTD Q4

2019 2020

NOTABLE TRANSACTIONS

5

Acquires

Handil Holdings has acquired Christmas Tree Shops from Bed Bath & Beyond (Nasdaq:BBBY), a retailer

of bed & bath, furniture, home décor, kitchen & dining, food & drink, and outdoor & garden products.

Terms of the transaction were not disclosed. Christmas Tree Shops generated approximately $400

million in revenues in 2019, according to UBS.12 The transaction highlights a broader restructuring of

Bed Bath & Beyond as it focuses on its core competencies and bolstering its supply chain and

merchandising operations to improve its strategic portfolio focus on the Home, Baby, Beauty, and

Wellness markets.

“Today’s announcement builds on the purposeful steps we have made throughout the year to simplify

our portfolio, unlock capital and create clear strategic focus to accelerate our plans to build our

authority in the Home, Baby, Beauty and Wellness markets,” said Mark Tritton, Bed Bath & Beyond’s

President and CEO in a press release.13

Handil Holdings, LLC acquires Christmas Tree Shops, Inc.

(October 2020, Undisclosed)


Handil Holdings

Acquires

Brand Velocity Partners (BVP) has acquired leading e-commerce provider of high-end barbeque grills,

outdoor kitchen products, and grilling accessories BBQGuys for an enterprise value of approximately

$140 million. Included in the transaction is affiliated company Blaze Outdoor Products, which provides

barbeque products and accessories. BBQGuys has leveraged rapid order fulfillment capabilities, a

comprehensive e-commerce platform, and scaled infrastructure to deliver 27% annual growth over the

past 15 years, according to a press release.14 Blaze Outdoor Products has also recorded strong sales

penetration over the last seven years, averaging 50% annual growth over the period.

"BBQGuys has an entrenched and scalable position in this large, fragmented, growing market," said

Steve Lebowitz BVP Co-Founder and Managing Partner, in the press release. "The backyard is the new

vacation spot. With the company's market expected to grow from $9.7 billion in 2019 to over $11.7

billion by 2024, BBQGuys will benefit from a strong demand profile and secular tailwinds. We're excited

to partner with such a talented management team to build the brand."

Brand Velocity Partners acquires BBQGuys

(September 2020, $140 Million)

HNI Corporation (NYSE:HNI), a premier office furniture and hearth product manufacturer, has agreed to

acquire leading e-commerce distributor of high-design furniture and accessories for office and home

settings, Design Public Group. Terms of the transaction were not disclosed. The acquisition includes

Design Public’s two e-commerce platforms – Design Public and Danish Design Store. The transaction

highlights investor appetite for online home goods providers serving attractive end markets, including

home office and furniture. The addition of Design Public bolsters HNI’s workplace furnishings and

residential building products offerings and expands its customer network.

“This acquisition aligns nicely with our long-term strategies. Design Public is a digitally native company

bringing skills and capabilities to help us accelerate our digital and e-commerce initiatives. In addition

to supporting our traditional distribution models, we will also increase our reach to a broader consumer

group that increasingly buys furniture online,” commented Jeff Lorenger, Chairman, President and Chief

Executive Officer of HNI Corporation in a press release.11

HNI Corporation to acquire Design Public LLC

(December 2020, Undisclosed)

Several notable transactions have been announced or completed in the industry in 2020. Select transactions are outlined below,

followed by a more comprehensive list.

To Acquire

Enterprise

Date Target Acquirer Target Business Description Value (mm)

12/01/20 Design Public HNI (NYSE:HNI)Offers furniture and accessories for home and office settings

through its e-commerce platform.-

12/01/20 Jalan Jalan WelconManufactures furniture products including beds, seating, tables, and outdoor furniture.

-

11/02/20 Yeleko GrowGeneration Operates a chain of hydroponic garden centers. $32.0

10/28/20 Custom Personalization LiveXLive (Nasdaq:LIVX)Provides personalized home goods, apparel, and handcrafted jewelry online.

$6.0

10/14/20Old Brick Furniture and

MattressBennington Furniture Offers home and mattress products. -

10/13/20Christmas Tree

Shops

Handil

Holdings

Operates a chain of gift stores providing home décor, furniture,

kitchen & dining, and outdoor products.-

10/13/20D.William Garden

CenterGroupe Richer

Distributes sods, paving stones, slabs, and garden maintenance products.

-

10/12/20 Hydroponics DepotGrowGeneration

(Nasdaq:GRWG)Provides indoor and outdoor gardening equipment and supplies. -

10/08/20 American Bath Group Centerbridge Partners Manufactures bathing products. -

10/07/20Keystone

CollectionsWyrmwood Provides custom furniture products. -

09/29/20 BBQGuys/Blaze Outdoor Brand Velocity Partners Offers grills, outdoor products, and accessories. ~$140.0

09/16/20 De Pere Cabinet Wellborn Forest Manufactures semi-custom wood cabinets. -

09/02/20Kyle’s Custom Wood

Shop1847 Cabinet

Designs, builds, and installs custom cabinetry for contractors and homeowners.

$8.4

07/07/20 Mend Sleep Idle Group Manufactures mattresses. -

07/02/20 Cuisirama Les Ateliers Jacob Provides kitchen furniture products and accessories. -

06/26/20Malchow’s Home

FurnishingsMontgomery’s

Offers furniture, lighting, mattress and bedding, and flooring & window products.

-

06/22/20 ProLawn Turf ProGreen Designs and installs residential and commercial synthetic grass. -

05/07/20 Garden WeaselGeneral Tools &

InstrumentsManufactures garden and lawn tools. -

04/30/20 Salt Flat MaloufOffers home furnishing products including bedroom, outdoor,

living room, and office furniture.-

04/15/20 One Kings Lane CSC Generation Provides home furnishings through its online store. -

03/03/20 Value Plus Flooring Artisan Design GroupOffers hardwood, carpets, tile, and natural stone in its home furnishing retail stores.

-

02/25/20Alexis

ManufacturingRoll & Hill

Designs chairs and wood components for the Furniture industry.

-

02/21/20 Superior Quilting Mahanjan HomeManufactures bed pillows, decorative cushions, outdoor cushions, and bedding.

-

Source: Capital IQ, PitchBook, FactSet, and Capstone Research

SELECT TRANSACTIONS

6


PUBLIC COMPANY DATA: FURNITURE & HOME FURNISHING

Price % 52 Wk Market Enterprise LTM EV / LTM

Company 12/03/20 High Cap Value Revenue EBITDA Margin Revenue EBITDA

Casper Sleep Inc. $6.19 39.1% $250.9 $220.6 $473.6 NM NA 0.5x NM

Ethan Allen Interiors Inc. $18.81 98.0% $471.2 $536.6 $567.0 $74.0 13.1% 0.9x 7.2x

home24 SE $22.67 89.4% $598.7 $563.0 $526.8 $28.3 5.4% 1.1x 19.9x

La-Z-Boy Incorporated $38.40 90.0% $1,771.9 $1,746.4 $1,587.7 $267.5 16.8% 1.1x 6.5x

Purple Innovation, Inc. $29.16 87.4% $1,776.8 $1,724.8 $598.9 $74.7 12.5% 2.9x 23.1x

Sleep Number Corporation $72.18 97.1% $2,003.5 $2,378.6 $1,729.8 $206.0 11.9% 1.4x 11.5x

Tempur Sealy International, Inc. $25.29 97.5% $5,218.7 $6,864.3 $3,491.2 $659.4 18.9% 2.0x 10.4x

Mean 13.1% 1.4x 13.1x

Median 12.8% 1.1x 11.0x

Harmonic Mean 11.1% 1.1x 10.6x

EV = enterprise value; LTM = last twelve months

$ in millions, except per share data

NM = Not Meaningful

Source: Capital IQ as of December 3, 2020

7

PUBLIC COMPANY DATA: HOUSEHOLD PRODUCTS



Hamilton Beach Brands $18.13 72.5% $248.1 $318.9 $575.3 $42.5 7.4% 0.6x 7.5x

Lifetime Brands, Inc. $14.09 97.4% $306.7 $666.6 $746.9 $83.3 11.2% 0.9x 8.0x

Newell Brands Inc. $21.77 99.4% $9,237.0 $14,910.0 $9,319.9 $1,478.1 15.9% 1.6x 10.1x

Spectrum Brands Holdings, Inc. $66.93 97.1% $2,883.5 $4,947.7 $3,964.2 $573.8 14.5% 1.2x 8.6x

Tupperware Brands Corporation $36.95 98.8% $1,817.0 $2,513.4 $1,667.7 $252.3 15.1% 1.5x 10.0x

Mean 12.8% 1.2x 8.8x

Median 14.5% 1.2x 8.6x



PUBLIC COMPANY DATA: LAWN & GARDEN



Central Garden & Pet Company $39.01 87.1% $2,011.6 $2,173.9 $2,695.5 $299.9 11.1% 0.8x 7.2x

The Scotts Miracle-Gro Company $170.33 94.6% $9,494.2 $11,185.7 $4,131.6 $713.6 17.3% 2.7x 15.7x

The Toro Company $89.34 96.7% $9,586.0 $10,167.7 $3,272.2 $521.9 16.0% 3.1x 19.5x

Mean 14.8% 2.2x 14.1x

Median 16.0% 2.7x 15.7x


Source: Capital IQ as of December 3, 2020

8

PUBLIC COMPANY DATA: HOME GOODS RETAILERS



Amazon.com, Inc. $3,186.73 89.7% $1,598,945.5 $1,627,357.5 $347,945.0 $49,336.0 14.2% 4.7x NM

Bed Bath & Beyond Inc. $19.57 74.8% $2,435.9 $4,551.8 $9,861.6 $969.1 9.8% 0.5x 4.7x

RH $458.15 98.0% $8,940.4 $10,659.8 $2,534.7 $590.1 23.3% 4.2x 18.1x

Target Corporation $174.92 96.6% $87,595.2 $96,604.2 $88,621.0 $8,827.5 10.0% 1.1x 10.9x

Walmart Inc. $149.30 97.2% $422,412.4 $483,360.4 $548,743.0 $41,408.8 7.5% 0.9x 11.7x

Wayfair Inc. $239.77 68.7% $23,844.7 $25,119.9 $13,007.8 $297.5 2.3% 1.9x NM

Williams-Sonoma, Inc. $111.11 96.9% $8,521.8 $9,292.4 $6,334.1 $1,407.7 22.2% 1.5x 6.6x

Mean 12.8% 2.1x 10.4x

Median 10.0% 1.5x 10.9x



9

KEY TAKEAWAYS


• COVID-19 has reshaped the Consumer Goods sector, driving consumer habits to shift and

permanently alter what we value, how and where we shop, in addition to how we live,

educate and work.

• Quarantine restrictions and work from home culture is fueling home goods spending across

furniture, home office, outdoor garden and patio décor, and investors are taking note of the

bright long-term outlook of these sectors.

• M&A activity is expected to accelerate for quality home goods companies with established

online and omnichannel presence, strong brand recognition, unique business models (i.e.,

vertical integration with in-house logistics, etc.) and differentiated product offerings.

• Most consumer-focused private equity groups have now shifted from managing their current

portfolios in the crisis to looking for new investments and are expected to be actively pursuing

both platform and add-on investments throughout 2021.

• Strategics will continue to be active, seeking to increase their e-commerce channel exposure,

diversify their product offerings into high growth categories and refine their sourcing

and logistics.


Connor McLeod

Research Associate

[email protected] | 617-619-3319

Connor is a Research Associate at Capstone Headwaters primarily specializing in Building Products &Construction Services, Consumer & Retail, Healthcare, and Cybersecurity. Prior to joining CapstoneHeadwaters, Connor was a specialist with the Investor Services team at BlackRock where he worked withmutual funds, closed end funds, and exchange traded funds and communicated fund performance,relevant market dynamics, and facilitated trades for shareholders, financial advisors, and institutionalclients. Connor holds a BA in Economics from Bates College and is a Series 7 RegisteredSecurities Representative.

HOME GOODS REPORT CONTRIBUTORS

10

Lisa Tolliver

Senior Director


Lisa has over 20 years of experience in the investment banking industry, primarily focused on advisingmiddle market private business owners in liquidity related transactions. As a Senior Director in CapstoneHeadwaters’ Consumer practice, she works closely with clients to advise and execute domestic andcross-border M&A transactions, recapitalizations and capital raises. Lisa has deep M&A expertise andknowledge of businesses in the e-commerce sector, particularly related to those selling via direct-to-consumer, Amazon, mass and OTC channels. Prior to Capstone, Lisa worked in the Capital StrategiesGroup at Morgan Stanley Smith Barney and spent 10 years working for the middle market investmentbanking arm of Citigroup, where she was involved in the evaluation, marketing and closing of numeroustransactions involving private businesses and corporate divestitures. Lisa received her BA on academicscholarship from Illinois State University and is a Series 7 and 63 Registered Securities Representative.

Brianna Conway

Associate


Brianna is an Associate in the firm’s Chicago office, working closely with private business owners toadvise and execute mergers, acquisitions and strategic capital raises. Prior to joining CapstoneHeadwaters, Brianna was an Analyst at PwC Corporate Finance on their M&A team where she focusedon healthcare provider and services sell-side transactions. Brianna graduated with honors from IndianaUniversity’s Kelley School of Business with a major in Business Economics and Public Policy. She holdsher Series 7, 63 and 79 licenses.


Kenneth Wasik

Managing Director


Ken joined Capstone Headwaters to lead the Consumer & Retail practice. He brings nearly 25 years of

investment banking experience including domestic and international mergers & acquisitions, initial and

secondary offerings of public companies, debt raises and private placements for his clients. He has

helped raise over $10 billion in capital for clients during his career. He joins Capstone from Stephens

Investment Bank, where he started and led the Consumer Products Group. Prior to Stephens, Ken was

with Jefferies and Co. as Managing Director of Consumer Products. Before Jefferies and Co., he was

Head of the Consumer, Food and Retail Group at Houlihan, Lokey, Howard, and Zukin, and was

responsible for building out Houlihan’s consumer and retail coverage universe, as well. Ken began his

career in Investment Banking at UBS in New York, NY, where he supported execution of large packaged

goods companies. Ken is a Series 79 Registered Investment Banking Representative and holds an MBA

in Finance from Columbia University and a BS in Accounting from St. Joseph’s University.

FIRM TRACK RECORD

Capstone Headwaters professionals have represented clients across the Consumer Products & Services industry. This focus

allows Capstone Headwaters to provide Home Goods clients with real-time transaction feedback and immediate access to

key decision makers among the industry’s most active acquirers and investors. A sampling of Capstone Headwaters' closed

transactions is shown below:

11


CONFIDENTIAL

Leading E-commerce

Provider of

Soft Home Goods

has been acquired byhas been acquired by

Under LOI

a portfolio company of

has been acquired by

has recapitalized with

has merged with

a portfolio company of

has partnered with

has been acquired by has been acquired by

CONFIDENTIAL

E-commerce Provider

of Flowers & Gift

Products

Capital Raise

CONFIDENTIAL

Retailer & Online Seller of

Jewelry, Gift & Home

Products

Market Prep

CONFIDENTIAL

Designer & Seller of

Protective Electronics

Accessories

Market Prep

CITATIONS

1. Wayfair, “Wayfair Announces Second Quarter 2020 Results,”

https://s24.q4cdn.com/589059658/files/doc_financials/2020/q2/Q2-2020-Press-Release.pdf, accessed October 19, 2020.

2. Williams-Sonoma, “Williams-Sonoma, Inc. announces second quarter 2020 results,” https://ir.williams-

sonomainc.com/investor-information/news-releases/news-release-details/2020/Williams-Sonoma-Inc.-announces-

second-quarter-2020-results/default.aspx, accessed October 19, 2020.

3. Casper, “Investor Presentation September 2020,” https://ir.casper.com/home/default.aspx, accessed October 20, 2020.

4. U.S. Census Bureau, “Monthly Retail Trade Report,” https://www.census.gov/retail/index.html, accessed October 19,

2020.

5. Purple Innovation, “Purple Innovation Reports Record Second Quarter 2020 Results,”

https://investors.purple.com/press-releases/news-details/2020/Purple-Innovation-Reports-Record-Second-Quarter-

2020-Results/default.aspx, accessed October 19, 2020.

6. Signifyd, “Year Over Year Ecommerce Growth,” https://www.signifyd.com/ecommerce-pulse-data/, accessed October

19, 2020.

7. Sleep Number, “Q3 2020 Earnings Call,” https://s25.q4cdn.com/489093953/files/doc_financials/2020/q3/Q3-2020-

Earnings-Call_2020-10-14_Transcript.pdf, accessed October 19, 2020.

8. Tempur Sealy, “Tempur Sealy Reports Second Quarter 2020 Results,” http://investor.tempursealy.com/news-

releases/news-release-details/tempur-sealy-reports-second-quarter-2020-results, accessed October 19, 2020.

9. Tempur Sealy, “Tempur Sealy Provides Update of Improved Business Trends,” http://investor.tempursealy.com/news-

releases/news-release-details/tempur-sealy-provides-update-improved-business-trends, accessed October 20, 2020.

10. Scotts Miracle-Gro Company, “FQ# 2020 Earnings Call Transcripts,” https://scottsmiraclegro.gcs-web.com/static-

files/b73f181c-2a62-4003-b4c6-97771d1e0235, accessed October 17, 2020.

11. HNI Corporation Announces Agreement to Acquire Design Public Group,”

https://www.businesswire.com/news/home/20201201006024/en/HNI-Corporation-Announces-Agreement-to-Acquire-

Design-Public-Group, accessed December 4, 2020.

12. UBS, “Bed Bath & Beyond,” https://www.ubs.com/global/en/our-firm/what-we-do/research.html, accessed October 20,

2020.

13. Home Textiles Today, “Bed Bath & Beyond sells Christmas Tree Shops and hospitality operation,”

https://www.hometextilestoday.com/financial/bed-bath-beyond-sells-christmas-tree-shops-and-hospitality-operation/,

accessed October 19, 2020.

14. Cision, “Brand Velocity Partners Acquires BBQGuys, the Leading E-Commerce Platform Dedicated to Outfitting Outdoor

Living Spaces for Everything BBQ And Beyond,” https://www.prnewswire.com/news-releases/brand-velocity-partners-

acquires-bbqguys-the-leading-e-commerce-platform-dedicated-to-outfitting-outdoor-living-spaces-for-everything-

bbq-and-beyond-301138836.html, accessed October 18, 2020.

Disclosure: This report is a periodic compilation of certain economic and corporate information, as well as completed and announced merger and acquisi-

tion activity. Information contained in this report should not be construed as a recommendation to sell or buy any security. Any reference to or omission of

any reference to any company in this report should not be construed as a recommendation to buy, sell or take any other action with respect to any security of

any such company. We are not soliciting any action with respect to any security or company based on this report. The report is published solely for the

general information of clients and friends of Capstone Headwaters. It does not take into account the particular investment objectives, financial situation or

needs of individual recipients. Certain transactions, including those involving early-stage companies, give rise to substantial risk and are not suitable for all

investors. This report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied

upon as such. Prediction of future events is inherently subject to both known and unknown risks and other factors that may cause actual results to vary

materially. We are under no obligation to update the information contained in this report. Opinions expressed are our present opinions only and are subject

to change without notice. Additional information is available upon request. The companies mentioned in this report may be clients of Capstone Headwaters.

The decisions to include any company in this report is unrelated in all respects to any service that Capstone Headwaters may provide to such company. This

report may not be copied or reproduced in any form, or redistributed without the prior written consent of Capstone Headwaters. The information contained

herein should not be construed as legal advice.

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https://s24.q4cdn.com/589059658/files/doc_financials/2020/q2/Q2-2020-Press-Release.pdfhttps://ir.williams-sonomainc.com/investor-information/news-releases/news-release-details/2020/Williams-Sonoma-Inc.-announces-second-quarter-2020-results/default.aspxhttps://ir.casper.com/home/default.aspxhttps://www.census.gov/retail/index.htmlhttps://investors.purple.com/press-releases/news-details/2020/Purple-Innovation-Reports-Record-Second-Quarter-2020-Results/default.aspxhttps://www.signifyd.com/ecommerce-pulse-data/https://s25.q4cdn.com/489093953/files/doc_financials/2020/q3/Q3-2020-Earnings-Call_2020-10-14_Transcript.pdfhttp://investor.tempursealy.com/news-releases/news-release-details/tempur-sealy-reports-second-quarter-2020-resultshttp://investor.tempursealy.com/news-releases/news-release-details/tempur-sealy-provides-update-improved-business-trendshttps://scottsmiraclegro.gcs-web.com/static-files/b73f181c-2a62-4003-b4c6-97771d1e0235https://www.businesswire.com/news/home/20201201006024/en/HNI-Corporation-Announces-Agreement-to-Acquire-Design-Public-Grouphttps://www.ubs.com/global/en/our-firm/what-we-do/research.htmlhttps://www.hometextilestoday.com/financial/bed-bath-beyond-sells-christmas-tree-shops-and-hospitality-operation/https://www.prnewswire.com/news-releases/brand-velocity-partners-acquires-bbqguys-the-leading-e-commerce-platform-dedicated-to-outfitting-outdoor-living-spaces-for-everything-bbq-and-beyond-301138836.html

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www.capstoneheadwaters.com

Capstone Headwaters is one of the largest and most active independent investment banking firms in the United States. The

firm has a rich 18+ year history of achieving extraordinary results for middle market entrepreneurs, business owners,

investors, and creditors. The firm offers a fully integrated suite of corporate finance services, including merger & acquisition,

debt & equity placement, ESOP advisory, corporate restructuring, valuation & fairness opinion, and financial advisory

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Headquartered in Boston, Capstone Headwaters has over 170 professionals across 17 offices in the U.S. with 16 dedicated

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