Swag seller Brandito makes first private equity-backed acquisition

Brandito’s HQ. (BizSense file photo)

Another Richmond-based company is putting its newly acquired private equity backing to use.

The latest is Brandito, which sells branded promotional merchandise and earlier this month closed its first deal using the war chest it took on last August from Chicago-based private equity investor Monroe Street Partners.

Brandito purchased PromoSpark, a similar branded merchandise company based in Fairfield, Ohio. Financial terms of the deal were not disclosed.

Brandito founder Michael Lovern, who continues to run the company after selling his majority stake to Monroe Street in exchange for the capital, said the PromoSpark deal is the first of what’s expected to be more of such deals in the future.

But he said the company isn’t being overly aggressive just for the sake of growth.

Michael Lovern

“We could very easily view Brandito as a platform to roll other organizations up at a fairly rapid rate. But it’s not our style. It’s not how we want to approach acquisitions,” Lovern said, adding that a cultural fit with acquisition targets is vital. “We want to be as picky as possible, as strategic as possible.”

The PromoSpark deal brings 18 employees into the fold at Brandito, including Sarah Johnson, who founded PromoSpark and will continue on as director of Brandito’s Midwest division.

PromoSpark will take on the Brandito brand on April 1, and Brandito plans to maintain PromoSpark’s office and distribution center, which Lovern said will help the company expand its distribution footprint.

“It’s going in and building on a great foundation and helping them grow,” Lovern said of taking on PromoSpark.

Lovern wouldn’t comment on the size of PromoSpark’s book of business but said the new addition will bring Brandito to around $40 million in annual revenue. Brandito now has around 80 employees. It continues to be headquartered at 2100 Tomlynn St., near the I-95 and I-195 interchange and across the street from Topgolf.

Brandito has a 40,000-square-foot distribution facility.

Lovern, who got his start in staffing and recruiting, founded Brandito in 2009. It peddles T-shirts, coffee mugs, pens and other tchotchkes that companies put their name on. It also offers services including customized online stores and creative marketing.

While the company hasn’t disclosed how much in capital it took on from Monroe Street, Lovern said Brandito has plenty to keep the acquisitions going in a time when several trends in the industry are opening the door for future deals.

He said there’s a steady stream of consolidation within the supply chain that fuels the industry, as well as an aging-out of owners of some of Brandito’s peer companies around the country.

“There are lots of people who have run great businesses for a long time and it’s getting to a point now where size and scale does matter, especially to work with certain types of customers. There is a need to warehouse and ship goods all over the country,” Lovern said.

“We’re just getting started,” he said.

Brandito is the latest in a recent streak of acquisitions by Richmond-based companies that are deploying new private equity pools.

Virginia Green, a 20-year-old local lawncare company, last month acquired a smaller competitor in Maryland. It marked the company’s 10th acquisition in three years and the first funded by the funds it received late last year in a deal with California-based private equity firm Golden Gate Capital.

Also last month, local chain Flagstop Car Wash bought three existing locations from rival Green Clean Express Auto Wash. That purchase was the second funded by capital received from private equity firm Garnett Station Partners.