Dynamic Earth sale presents case study for when and how

Eric Olson, SBJ EditorMatt O’Reilly presents a good case study for knowing when and how to sell a business.

Two weeks after finalizing the sale of his business baby, Dynamic Earth, O’Reilly reflected on the deal that now squarely places the 12-year-old outdoor gear store’s teenage years in the hands of an industry veteran. Austin, Texas-based Backwoods Retail Inc. acquired Dynamic Earth on Sept. 15 for undisclosed terms.

1. Time.
The sales decision starts with a fairly simple stat: O’Reilly was spending only 10 percent

O'Reilly

O’Reilly

of his time running Dynamic Earth. What was he doing the rest of his days? Following his growing passions in social entrepreneurism and commercial development under his more recent startup, Green Circle Projects. O’Reilly is zoned in on building up Green Circle’s mixed-use property, Farmers Park, and the Farmers Market of the Ozarks that spun out of the 14-acre development on the southeast side. He also is dedicating time to TrailSpring, his nonprofit foundation for building mountain bike trails, and other philanthropic interests. (With a tagline of “The dirt connects us all,” TrailSpring’s 30 in 3 initiative sets out to bring 30 miles of professionally designed single track to the Springfield area within 3 years, beginning with Two Rivers Bike Park just off the Finley River and James River confluence.)

The goal is to really blur the lines of the role of a developer from an economic standpoint and the role of a developer from a community standpoint,” O’Reilly says.

2. Torch.
To meet his goals, O’Reilly realized the need to find a buyer worthy of accepting his Dynamic Earth torch. After all, he created the company concept to sell gear that promotes community experiences outdoors. O’Reilly was the sole owner and had built a dependable team led by General Manager Matt Lyons, who plans to stay in the role through the Backwoods transition.

Earlier this year, O’Reilly sent out an acquisition brief to a few companies he considers industry peers – those that hold to similar philosophies – and two responded with interest. Exclusive negotiations quickly began with the Mull family owners at Backwoods, and a letter of intent to purchase was signed within a few months.

3. Timing.
“The timing was extremely important,” O’Reilly says of the midsummer agreement.

Outdoor retailers are taking in a lot of product now through November, he says, and also writing orders for next spring. He wanted to ensure the new team was equipped to handle the workload without missing a beat for Dynamic Earth customers.

The urgency is now on Backwoods, a midsize company run by the founder’s daughter that has larger chain purchasing capacity. Operating nine stores across Texas, Colorado, Oklahoma, Nebraska and Kansas, the Springfield shop in Green Circle Shopping Center at Republic Road and National Avenue is Backwoods’ first in Missouri.

“We’ve always looked up to them,” O’Reilly says of the new owners.

4. Thing (that’s next).
The sale must have a trade-off with an upside. For O’Reilly, there’s time for development projects, with a focus on multifamily and retail.

“We always like doing unique projects,” he says, adding a couple of ideas are in the works but nothing concrete, yet.

Oh, and he gets a long-term tenant locked in at his uber green development.

When you pay rent to yourself, you’re just taking it out of one pocket and putting it into another,” O’Reilly says. “Now, we get to collect rent.”

He says the five-year lease with options is in line with the $14 to $17 per square foot for other triple net leases along Republic Road.

Austin, Texas-based Backwoods Retail Inc. acquired Dynamic Earth on Sept. 15. Photo courtesy GREEN CIRCLE PROJECTS

Austin, Texas-based Backwoods Retail Inc. acquired Dynamic Earth on Sept. 15.
Photo courtesy GREEN CIRCLE PROJECTS

And then there’s the app.

“On the side, I have a fun app project, totally unrelated to anything,” he says. “It’s a proprietary thing. We’re not talking about it yet. It’s too easy to duplicate.”

We can put money on it being related to the outdoors, though.

“It’s something I would use a lot,” O’Reilly says.

We’ve seen crazy things happen in the app marketplace, considering Flappy Bird and Yo. Time will tell with O’Reilly’s vision.

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