Roseville-based Epoch Lacrosse, with a new ownership structure, continues its fast growth as it continues to make inroads against bigger sporting-goods manufacturers.
The growth — 70% from 2016 to 2017 and 52% from 2017 to 2018 — is expected to produce $15 million in annual revenue within the next three years, said CEO and founder James Miceli.
It also forced a decision on how Miceli and his team wanted to structure the company.
"We were approached by a strategic [partner] that wanted to buy us, and it was something that we highly considered," Miceli said. "But at the end of the day I raised my hand and said, no, I wanted to continue to grow this."
With permission from the previous board of directors, Micelli found a new investor.
Epoch had been half-owned by Miceli and half-owned by Powerplay, a retail branding and marketing company in Mendota Heights. Because Powerplay's focus was not manufacturing, it was willing to let Miceli seek alternatives.
Miceli found a new investor, which as of May owns 10% of the company. Miceli's ownership is up to 75%. Ryan Hurley, a former college and pro lacrosse player and a partner in Epoch, owns 5%. The other employees own 10% of the company.
The spring months have been full of changes for the company, including forming Epoch Sports to combine the marketing and manufacturing units. The company is still doing business as Epoch Lacrosse.
"We are so incredibly flexible right now," Miceli said. "We went from days to hours to now they can make production changes within minutes."
Both units now operate out of the company's 10,000-square-foot facility in Roseville where in 2015 it established its local manufacturing operation and took most of its production in-house.
Establishing the manufacturing operation freed the company to develop, test and produce products much quicker by eliminating the six weeks or longer turnaround time it had when its products were produced in Asia, Miceli said. Today that decision also offers relief from trade tariffs on its sticks, though it still faces tariffs for components of its protective equipment.
That change also allowed for the launch of Epoch Labs about 30 days ago. It is a forward looking skunk works division to design innovative products in conjunction with select retail partners. They can now create limited run products that get in players' hands quicker and can be used to gauge overall market reaction for its new designs.
The limited editions can be custom colorways or a test of lighter or otherwise differently configured shafts.
"Its all about getting more technology into the marketplace," Miceli said.
That capability also now allows Epoch to cater its products to its growing roster of professional lacrosse players, including a leading scorer in the new professional Premier Lacrosse League and top-level collegiate teams.
"It's really unlocking the capabilities of U.S. based manufacturing, in that customization and personalization," Miceli added.
When private companies reach a certain size and growth rate, they can expect to draw attention from strategic buyers or private-equity investors. The owners then must decide whether to keep going or sell.
Andy Cantwell, CEO and managing partner of Carlson Private Capital Partners, has been building the investment office of the Carlson family for the past year, searching for investment opportunities. He has been in the private-investment industry for 22 years.
"There is a value, if you believe in what you are doing, you've got a good growth plan, and you feel like you are in a position that could be defensible," said Cantwell, whose firm was not involved in the Epoch investments. "If you do the right things the value of the business oftentimes can increase for that business owner."
In Epoch's case, the owner decided growth can be better maintained by keeping the company.