Exclusive: OtterBox maker explores $2.5 billion-plus sale: sources

Tue Aug 26, 2014 8:00pm EDT

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(Reuters) - Otter Products LLC, the privately held company that makes the OtterBox protective cases for mobile phones, is exploring a sale that could value the company at more than $2.5 billion, including debt, according to people familiar with the matter.

Otter Products, founded in 1998 by entrepreneur Curt Richardson and owned by him and his family, has hired investment bank Goldman Sachs Group Inc to manage the sale process, the people said this week.

Some private equity firms have expressed interest in the company, the people added, cautioning that no deal is certain.

The sources asked not to be identified because the sale process is not public. Otter Products did not respond to a request for comment while Goldman Sachs declined to comment.

Based in Fort Collins, Colorado, Otter Products makes cases for handsets produced by the likes of Apple Inc, LG Corp and BlackBerry Ltd. The company describes OtterBox as the top-selling protective case for smartphones in the United States and Canada.

Richardson came up with OtterBox while working on waterproof mobile phone cases in his garage. His wife named it after the eponymous animal's fur.

As mobile phones adapted touch screens, demand for protective cases grew, a trend that Richardson capitalized on. In 2013, Otter Products had pro forma sales of about $925 million, according to Moody's Investors Service Inc.

Apple products account for more than 75 percent of Otter Products' revenues, according to Moody's. Otter Products expanded last year through the acquisition of smaller rival LifeProof. The company competes with Incipio Technologies Inc.

The consumer electronics sector has delivered some big wins of late for private equity firms. Carlyle Group LP, for example, almost doubled its roughly $500 million investment in Beats Electronics, the company best known for its Beats by Dr Dre line of headphones, after Apple acquired Beats earlier this month, just 10 months after Carlyle invested.

(Reporting by Greg Roumeliotis and Olivia Oran in New York; Editing by Leslie Adler)

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