Weber Inc.   WEBR   $15.00-$17.00 46.875 million shares Underwriters: Goldman Sachs, BofA Securities, JP Morgan, BMO Capital, Citigroup, UBS, Wells Fargo, Keybanc Capital   Co-Managers:  Proposed trade date of 8/5 They are the leading outdoor cooking company with the strongest and most trusted brand in the global outdoor cooking market.

Weber Inc.   WEBR

• 46,875,000 shares to be offered between $15.00 and $17.00 per share
• Underwriters: Goldman Sachs, BofA Securities, JP Morgan, BMO Capital, Citigroup, UBS, Wells Fargo, Keybanc Capital Co-Managers:
• Proposed trade date of 8/5
• Rating =3

Click here to view the prospectus.

https://www.sec.gov/Archives/edgar/data/1857951/000119312521224970/d39834ds1a.htm

Company Overview

They are the leading outdoor cooking company with the strongest and most trusted brand in the global outdoor cooking market. Their founder George Stephen, Sr., established the outdoor cooking category when he invented the original charcoal grill nearly 70 years ago. In the decades since, they have built a loyal and global following of both grilling enthusiasts and barbeque professionals in backyards all around the world. They have continuously disrupted and led the outdoor cooking category, through a comprehensive and expanding product portfolio including traditional charcoal grills, gas grills, smokers, pellet and electric grills, and recently their cutting-edge Weber Connect™ technology-enabled grills. They believe they offer the most complete outdoor cooking portfolio globally, with their full range of premium products sold in 78 countries in fiscal 2020.

They believe Weber is the only outdoor cooking brand with global scale and a vertically integrated manufacturing platform. Their track record of premium product innovation and the strength of their brand has led to a market-leading share of 23% in the U.S. and 24% globally in 2020, according to Frost & Sullivan. They are leaders in the largest and most attractive markets in outdoor cooking, including the U.S., Germany, Australia, Canada and France. Beyond these markets, they estimate that they have either the number one or number two brand position in each of the key geographies they serve.

With the 2020 introduction of their connected grilling platform, Weber Connect™, they continue to be at the forefront of innovation in the outdoor cooking industry. Weber Connect brings together cutting-edge grilling technology, a mobile app and a cloud-based infrastructure on a single interconnected platform. They believe that their connected products make grilling the perfect meal simple with their smartphone-enabled, step-by-step cooking experience. The Weber Connect platform is powered by June OS, their award-winning smart cooking software solution developed by June Life. In 2018, they made a minority investment in June Life and entered into a license and development agreement. In January 2021, they acquired the company in full to further enhance their leadership position in connected outdoor cooking. Their track record of growth is driven by their iconic brand, massive installed base of loyal enthusiasts, and approximately 26% of their revenues being comprised of accessories and consumables all of which support a predictable, recurring revenue model. More recently, their significant investments in Weber Connect, Weber.com, and the ongoing consumer shifts towards backyard and outdoor leisure have further enhanced their growth profile

They bring their products to market through a diverse and powerful omni-channel network comprised of wholesale, direct-to-consumer (“DTC”) and e-commerce channels. Their wholesale channel is made up of 4,710 retailers with 31,690 physical locations. They work with leading global, regional and large multi-national retailers such as Costco Wholesale, The Home Depot, Lowe’s Companies, and Walmart Inc., as well as European retailers including Bauhaus and OBI. Independent and Specialty retailers comprise an important part of their channel mix by serving consumers who seek more education, a broader assortment of products and higher service. They believe their broad global brick-and-mortar retail presence reinforces their brand leadership. Their commitment to their retailers is evidenced by the numerous awards that they have won for their category leadership, service excellence and new product innovation. Most recently, in 2020, they were recognized as Supplier of the Year at leading retailers such as Ace Hardware and The Home Depot Canada.

IPO Detail

This is the initial public offering of Weber Inc., and no public market currently exists for its common stock. Weber Inc. is offering 46,875,000shares of common stock as described in the prospectus. The company expects the initial public offering price of its common stock to be between $15.00 and $17.00 per share. The company has applied to list its common stock on the New York Stock Exchange under the symbol “WEBR.”

Upon completion of this offering, they will have two classes of common stock: Class A common stock and Class B common stock. The Class A common stock offered hereby will have one vote per share and economic rights and the Class B common stock will have one vote per share but no economic rights. Upon completion of this offering, the Pre-IPO LLC Members, including entities controlled by BDT Capital Partners, LLC, their sponsor, and certain members of management, will hold shares of Class B common stock that will entitle them to 74% of the combined voting power of their common stock (or 71% if the underwriters exercise their option to purchase additional shares of Class A common stock in full).

Use of Proceeds

They estimate that their net proceeds from this offering will be approximately $712.5 million. They will use all of the net proceeds from this offering (including net proceeds received if the underwriters exercise their option to purchase additional shares of Class A common stock) (i) to acquire 15,625,000 newly issued LLC Units from Weber HoldCo LLC, (ii) to acquire 27,421,266 LLC Units from certain Pre-IPO LLC Members, and (iii) to repurchase 3,828,734 shares of the Class A common stock received by the Blocker equityholders in connection with the merger of Weber Merger Sub, LLC with and into Blocker, in each case at a price per LLC Unit and share of Class A common stock equal to the initial public offering price of their Class A common stock minus underwriting discounts. See “Organizational Structure—The Reorganization Transactions.”

They will cause Weber HoldCo LLC to use the proceeds from the sale of the LLC Units to Weber Inc. as follows: (i) to pay fees and expenses of approximately $17.4 million in connection with this offering and the Reorganization Transactions; (ii) to repay $220.1 million of the outstanding borrowings under their Secured Credit Facility, as defined below, and (iii) for general corporate purposes.

The Secured Credit Facility consists of a term loan that matures on October 30, 2027 and a revolving credit facility that matures by October 20, 2025. Proceeds from the term loan and revolving facility were used to pay off their prior credit agreement, effect a portion of a special dividend, engage in business acquisition and equity repurchase activities, pay fees and expenses in connection with the foregoing and for working capital and general corporate purposes. Borrowings under the Secured Credit Facility bear interest at a rate equal to, at their option, either (i) LIBOR for the relevant interest period, adjusted for statutory reserve requirements (subject to a floor of 0.00% per annum for all revolving loans and a 0.75% floor for the term loan), plus an applicable margin or (ii) a base rate equal to the highest of (a) the rate of interest publicly announced from time to time by the administrative agent as its “prime rate”, (b) the federal funds effective rate plus 0.50% and (c) adjusted LIBOR for an interest period of one month plus 1.00% (subject to a floor of 0.00% per annum), in each case, plus an applicable margin. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Overview” for additional information about the Secured Credit Facility.

Certain of the underwriters and/or their respective affiliates may be lenders under the Secured Credit Facility and, as a result, may receive a portion of the net proceeds from this offering that they intend to allocate to the repayment of such borrowings, on a pro rata basis across all applicable lenders thereunder.

Weber HoldCo LLC will not receive any proceeds from purchase of LLC Units from certain Pre-IPO LLC Members by them or the repurchase of shares of Class A common stock by them.

If the underwriters exercise their option to purchase additional shares of Class A common stock in full, they estimate that their additional net proceeds will be approximately $106.9 million. They will use the additional net proceeds they receive pursuant to any exercise of the underwriters’ option to purchase additional shares of Class A common stock to purchase LLC Units from certain Pre-IPO LLC Members and/or to repurchase shares of the Class A common stock received by the Blocker equityholders in connection with the merger of Weber Merger Sub, LLC with and into Blocker, in each case at a price per LLC Unit and share of Class A common stock equal to the initial public offering price of their Class A common stock minus underwriting discounts. As a result, Weber HoldCo LLC will not receive any additional proceeds from any exercise of the underwriters’ option to purchase additional shares of Class A common stock.

Competition

Market Opportunity

According to MetrixLab the installed base of U.S. grills is nearly 70 million units representing 56% penetration of U.S. households. They estimate that more than 30 million of these grills are Weber grills, based on MetrixLab, and are being replaced at a rate of over 2 million units per year. While they benefit from growth from their installed base, their business is not dependent on replacements. They will continue to grow based on the increasing number of first-time grill buyers; consumers purchasing second grills with a different fuel type; heightened demand for specialty grills such as smokers, pellet grills, electric grills and kamado grills; and additional revenue streams including accessories, consumables and grill services. They expect the outdoor cooking market will continue to benefit from increased investment in and around the home as well as macro consumer trends in at home food consumption, culinary exploration and health and wellness.

They believe that several fundamental shifts in consumer behavior are providing positive tailwinds for their industry, including the increasing adoption of outdoor lifestyles and rising focus on health and wellness. More than half (54%) of consumers report cooking more in 2020 and 52% of people cited health as one of their top reasons for cooking at home based on a survey from Hunter PR. The COVID-19 pandemic accelerated certain trends that benefited their industry, and, according to a 2020 survey of grill owners, 85% of grillers globally expect to grill as often or more often after the pandemic than they did before the pandemic. They believe that the grill represents the center of any outdoor lifestyle and their industry will see continued resiliency through the business cycle and growth driven by increasing demand for outdoor spaces.

They consider their market opportunity in terms of TAM, which is the revenue opportunity from the number of total households that they believe are able to own a grill and could be interested in purchasing a new one in current geographies where Weber operates and in potential markets. They define the SAM as the revenue opportunity from the total number of households that purchased a grill in a given year in markets where Weber currently operates.

According to Frost & Sullivan, their TAM is estimated at $49 billion globally and $9 billion in the United States and their SAM is estimated at $15 billion globally and $7 billion in the United States From 2015 to 2020, their SAM grew at a 3.0% CAGR and is projected to grow at a 4.5% CAGR from 2020 to 2025. They expect to grow both TAM and SAM as they expand beyond their current geographies and grow SAM as they introduce new products in their existing verticals and add new verticals to their product portfolio in geographies where they currently operate. As of 2020, they are approximately 7% penetrated in their global TAM and 18% penetrated in their U.S. TAM.

Target Markets

Introduce New and Disruptive Products They have a proven track record of consistently expanding their product portfolio to meet the evolving needs of their consumers. Their culture of innovation and strong manufacturing capabilities allow them to introduce disruptive and differentiated new products. Their success is evidenced by their diverse product portfolio and recent launches across technology, grilling, accessories, consumables and services including:

• Grilling Innovations — Historically, they have captured share in the outdoor cooking market by launching grill products that have revolutionized their consumer’s grilling experience. Their legacy of innovation started over 70 years ago when they invented the iconic Weber Kettle and transformed the charcoal grilling market. Since then, they have introduced the Genesis gas grill, the portable Weber Q grill, and the Pulse electric grill. In 2020, they launched the SmokeFire wood pellet grill to capitalize on demand in the fast-growing pellet grill sub-category. They believe the SmokeFire wood pellet grill will have a similar impact on the pellet industry as their iconic grills have had historically in their respective categories. They also have a long track record of success refreshing products in existing categories, which allows customers to upgrade while staying loyal to the Weber brand.
• Weber Connect™ — In 2020, they introduced their new connected device platform, Weber Connect powered by June OS. This Consumer Electronics Show award-winning precision grilling technology was first made available as the stand-alone Smart Grilling Hub, and as an integrated feature in their SmokeFire wood pellet grill. Today, Weber Connect is also available in their Genesis / Spirit gas grill and Pulse electric grill. They intend to make Weber Connect available in their charcoal grills and smokers in the future. Weber Connect is an integral part of their connected product pipeline of cutting-edge, technology-enabled grills and devices that will enhance the grilling experience for consumers.
• Accessories, Consumables and Services — Over the past 70 years, they have consistently developed and launched Weber branded outdoor cooking accessories and consumables to complement their core offering and provide a predictable, recurring revenue stream. These product offerings help ensure that Weber’s iconic brand stays at the forefront of all facets of the outdoor cooking experience while also providing attractive margins. They have developed a robust product pipeline that includes tools and cookware, cleaning supplies, multiple fuel types, gear, carts and covers, among others. Innovation in their growing accessory and consumables business will continue to create higher transaction frequency and drive increased consumer loyalty. They also intend to expand their service offerings to capitalize on their best-in-class customer service organization and the global footprint of their Weber branded retail stores and Weber Grill Academy sites to capture new revenue streams

As they have done throughout their history, they have identified opportunities for new product introductions in existing and new categories. They will continue to leverage their extensive experience and deep expertise to continue to regularly introduce new products that differentiate them from their competition and accelerate their growth.

Accelerate Direct-to-Consumer and E-Commerce Revenue Their DTC and e-commerce channels represented 20% of their revenue in 2020 and have grown 31% annually since 2018. Their DTC channel includes Weber.com, their independently operated Weber branded retail locations and Weber Grill Academy sites. Within their DTC channel, Weber.com has experienced explosive growth achieving a 135% CAGR from 2018 to 2020. Weber.com is a strategic focus as they believe consumers enjoy engaging directly with their brand through this channel. Due to their efforts, visits to Weber.com have expanded rapidly as evidenced by the 65 million global site visits they achieved in 2020, representing an increase of 83% compared to 2019. They also have long-standing relationships with the largest e-commerce players in their industry, including Amazon, HomeDepot.com and Lowes.com, and have experienced significant growth in this channel over the last several years. Their network of 170 Weber branded retail locations deliver an immersive brand experience for consumers as well as engagement with culinary grilling experts and knowledgeable staff. They believe there is a significant opportunity to increase DTC revenue by accelerating site visits and engagement of Weber.com and partnering with their retailers to launch additional Weber branded retail locations and Weber Grill Academy sites in attractive geographies throughout the world. They also expect purchasing to continue to migrate online providing positive tailwinds for their e-commerce channel.

Expand Customer Base and Consumer Revenue Streams In the last three years, Weber has added more than $200 million from new retail customers that did not distribute their brand prior to 2018. They have also demonstrated the ability to add new consumers: over the past three years, they have added nearly 12 million Weber Grill households in their top five markets, an increase of 22%. They have invested significantly in all facets of marketing to fuel this growth. From 2018 to 2020, they increased their advertising and marketing spending by 14%. In addition, they have bolstered their consumer insights, analytics and marketing team, hiring over 40 new positions in the last 12 months, to strengthen their marketing organization and build broader capabilities. In addition to adding new consumers, they believe they have a sizable opportunity to optimize direct engagement with their existing consumer base and create new sources of revenue. They currently maintain a database of millions of registered consumers; that base, supplemented with new data from sources like Weber.com and their connected products, gives them the ability to personalize marketing, promotional offers and programs to drive increased consumer loyalty. This will open up new revenue streams like incremental accessory sales and new customized subscription services.

Expand and Deepen Their Presence in Emerging Geographies They believe they have the opportunity to continue to expand into additional growing international markets. They intend to focus on the most attractive markets in Asia, Europe and Latin America. Within these markets, they aim to enhance the consumer outdoor cooking experience and teach millions of people how to grill the “Weber Way.” Although their top 12 developing markets currently account for approximately 10% of their revenue, they believe they can meaningfully expand this percentage in the future, to grow their customer base and drive net sales. Historically, the growth in their developing markets has been nearly two times the growth of their mature markets and they believe this pattern can be repeated as they expand in these emerging geographies and increase their global brand awareness.

Execute on Value-Enhancing Operational Initiatives In 2018, they launched their “Fuel the Growth” initiative to improve productivity within their supply chain, focusing on “Make Where They Sell” initiatives and distribution footprint optimization projects. To date, they have achieved over $64 million in gross productivity savings which has resulted in 150 bps of margin improvement and allowed them to increase growth investments. Key ongoing drivers of their Fuel the Growth initiative include sourcing initiatives in Mexico, Poland and Southeast Asia, their U.S. assembly plant consolidation, their new EMEA manufacturing facility in Zabrze, Poland and their distribution network optimization initiatives. In addition, they have various ongoing continuous improvement projects within their plants and distribution centers. They believe there is a significant opportunity for them to continue to expand their margins.

Company's Unique Strengths

Iconic Global Brand and Market Leader For nearly 70 years, the Weber brand has defined the outdoor cooking category by enriching the experience of grilling consumers around the world. Based on internal management estimates and in coordination with Frost & Sullivan, they believe revenue in their top five markets to be up to three times that of the next leading competitor. They are the most recommended brand in the outdoor cooking industry by consumers, according to MetrixLab, with total brand awareness of 87% in the United States, 86% in Germany, 89% in Australia, 74% in Canada, and 76% in France, the five largest grilling markets in the world. Their consumers often share a deep emotional connection with their iconic brand that is passed down from one generation to the next. 41% of consumers indicated Weber as the U.S. brand they are most likely to purchase next relative to only 18% and 2% for their next closest competitors, according to a 2020 MetrixLab Brand Health & Habits Survey. They are the only global manufacturer and distributor in the outdoor cooking industry with leading market share in nearly every product sub-category across geographies. The leadership of their global brand is demonstrated by holding the number one brand position in grilling, in the United States, Germany, Australia, France and Canada with 23%, 44%, 30%, 26% and 24% market share respectively, and 24% globally, according to Frost & Sullivan. In addition, they have the number one brand position in gas grilling across these five markets and the number one brand position in charcoal grilling in the United States and Australia, according to Frost & Sullivan. Gas and charcoal grill types continue to be preferred by consumers, with 51% of survey respondents indicating they are most likely to purchase a gas grill next and 26% indicating charcoal grills, relative to only 3% for pellet grills, according to a 2020 MetrixLab Brand Health & Habits Survey. Their brand leadership is further emphasized by their 22 global points of distribution through wholesale and direct retail channels across 78 countries.

Massive Community of Loyal Weber Enthusiasts Since 1952, they have cultivated deep bonds with generations of Weber owners and their families, as evidenced by their massive installed base of 30 million Weber grills in the U.S. and 50 million Weber grills globally. Their installed base coupled with impressive net promoter scores of 62 in the U.S., 65 in Germany and 52 in Australia, as of 2020, enable a powerful recurring revenue model through repeat grill sales, and branded accessories and consumables purchases. Their installed base continues to grow as they expand in international markets, where they combine what consumers love about their local grilling traditions with the magic of the Weber grilling experience. Their marketing strategies and recent investments in Weber.com continue to grow their massive community of Weber enthusiasts, with 65 million site visits in 2020 globally, representing an increase of 83% compared to 2019. Alongside this growth in Weber.com, they are rapidly building database marketing initiatives to further enhance their consumer relationships and maximize purchase frequency.

Leader in Product Development with Exceptional Quality Disruptive innovation has been part of the Weber culture since the introduction of the iconic Weber Kettle grill in 1952. Today they continue their legacy of innovation with their SmokeFire wood pellet grills, Pulse electric grills, and their Weber Connect platform. They believe that the Weber Connect platform has set the standard for connected grilling, as evidenced by the recent Consumer Electronics Show Award for best Connected-Home Product in 2020, and represents the future of their industry. They believe that their acquisition of June Life provides them with industry-leading in-house software engineering talent that will help drive continued innovation for years to come.

Throughout the decades, they have maintained an uncompromising approach to exceptional quality and performance. They believe this has allowed them to expand from their roots in charcoal grills to a diverse portfolio across price points and fuel types, including gas grills, electric grills, smokers, pellet grills and accessories, consumables and services. They pride themselves on bringing their commitment to quality and performance standards in each new category they enter. Weber is also recognized for developing and utilizing industry-leading features in the grilling category, such as Flavorizer bars (for even heating) and porcelain-enameled coating (for withstanding the high-heat applications). They employ an in-house team of engineers and designers to develop their products to ensure they meet their high standards of performance and quality. They also employ a best-in-class customer service organization that fuels brand satisfaction and loyalty.

Diversified Global Revenue Base and Broad Network of Distribution Partners in Each Region The iconic nature of their global brand enables them to sell in 78 countries across six continents. In 2020, approximately 58% of their revenue was generated in the Americas, 35% in Europe, Middle East and Africa (“EMEA”) and 7% in Asia-Pacific (“APAC”). They distribute their products through a diverse and powerful omni-channel platform, consisting of their wholesale, DTC and e-commerce channels. Across their distribution network, they believe Weber is the outdoor cooking brand that reinforces their distribution partners’ presence in the grilling category. In their wholesale channel, they work with leading global retailers including Ace Hardware and Costco Wholesale across the Americas, Europe and Asia. Their wholesale business also spans large international retail partners such as The Home Depot, Lowes Companies and Walmart Inc. across the U.S., Canada and Mexico, as well as Bauhaus and OBI in Europe. According to management estimates, at Ace Hardware, The Home Depot and Lowes, they represented 52%, 39%, and 32% dollar share of each retailer’s grilling category respectively in 2020. Across other regions, they distribute their products through a global network of independent and specialty dealers. Their DTC channel provides an unparalleled customer experience at Weber.com and their independently operated Weber branded retail stores and Weber Grill Academy sites. Weber.com features their complete product assortment and exclusive online offerings so consumers are able to compare products, read reviews and transact in a virtual environment. To complement their online presence, they operate a network of 170 Weber branded retail stores globally, which are strategically located in markets where they are leading consumer shifts to popularize the outdoor cooking industry. To further enhance their online presence, they offer their products on the online platforms of their retailer partners and digitally native retailers such as Amazon.com, where they are the number one outdoor cooking brand in the U.S. and capture 29% of the outdoor grill category.

U.S.-Led, Global Manufacturing Footprint and World-Class Supply Chain They are a vertically integrated manufacturer and the only major outdoor cooking company that maintains a significant U.S.-based manufacturing footprint that is complemented by other manufacturing capabilities throughout the world. They operate three manufacturing facilities in Illinois with core competencies in metal fabrication, welding, deep drawn stamping and porcelain-enameled coatings. In 2018, their U.S. operations were consolidated into their Huntley facility where approximately 55% of their global grill demand is currently produced. In addition, Weber maintains trusted relationships of more than 15 years with three major grill manufacturers in China and Taiwan to provide flexibility to produce some of their grills, which provides redundant manufacturing of key product lines. They have a long-standing history with a diversified set of suppliers who send components to their U.S. manufacturing facilities as well as their China manufacturing partners. Their 22 global distribution facilities serve 78 countries and have capabilities including truckload shipping to their customers and parcel service to support their growing DTC business. Their U.S.-led, diversified global manufacturing and distribution footprint provides Weber with a significant competitive advantage, allowing for a balanced combination of quality, speed and agility in response to customer demand locally and globally. They believe their diversified manufacturing platform also enables them to better manage potential supply chain disruptions and navigate changes in tariff policies more effectively than their competitors.

In 2020, they expanded their “Make Where They Sell” philosophy, and continued growth in the EMEA region drove the decision to commission a manufacturing plant in Europe and break ground on a new facility in Zabrze, Poland. This new location will manufacture and distribute key product lines for the EMEA market and is expected to open for operation in the fourth quarter of fiscal year 2021. The strategic location of this facility will facilitate reduced labor and transportation costs, resulting in positive improvements to their operating margin. The breadth and depth of their supply chain initiatives have been, and will continue to be, a key business focus and source of strong cash flow generation.

Exceptional Financial Profile Through Business Cycles Weber has a long track record of strong growth and resilient financial performance, through periods of varying macro-economic cycles. Their growth has been broad-based across product categories and geographies. Weber benefits from countercyclical trends associated with “eat at home” categories, where challenging economic periods lead families to cook and spend more time at home. However, Weber also thrives in strong economic times when disposable income and investments in and around the home and backyard are strong. Their business maintains a strong margin profile driven by their consistent premium pricing strategy, global scale, vertically integrated manufacturing capabilities, operational productivity programs and commitment to value-added product innovations. They are well positioned to continue to execute on their operational excellence initiatives, including their new manufacturing and distribution facility in Poland. Their resilient growth, margin improvement and efficient capital intensity all contribute to their strong free cash flow. Their strong free cash flow profile allows for significant capital allocation flexibility, enabling long-term shareholder value creation through multiple operating and financial strategies.

Company's Unique Risks

Their ability to understand consumers’ preferences and to timely identify, develop, manufacture, market and sell products that meet customer demand could significantly affect their business.

The markets in which they compete are highly competitive, subject to pricing pressure and include numerous other brands and retailers that offer a wide variety of competitive products; if they fail to compete effectively, they could lose their market position.

A deterioration in labor relations could adversely impact their global business. They are subject to separate collective bargaining agreements with certain labor unions in the United States, including with respect to employees in their Huntley, Illinois and Palatine, Illinois facilities, and works councils in Europe, as well as various other commitments regarding their workforce. They periodically negotiate with such unions and works councils representing their employees and may be subject to union campaigns, work stoppages and other potential labor disputes. At routine intervals, they renegotiate these collective bargaining agreements and may be unable to renew these collective bargaining agreements on the same or similar terms, or at all.

They depend on suppliers, including single-source suppliers and, in a few cases, sole-source suppliers, to consistently supply them with finished goods, raw materials and components for their products, and any failure to procure such finished goods, raw materials and components could have a material adverse effect on their business, product inventories, sales and profit margins. Additionally, if their independent suppliers and manufacturing partners do not comply with ethical business practices or with applicable laws and regulations, their reputation, business, and results of operations could be harmed.

Because they rely on foreign suppliers and they sell products in foreign markets, they are susceptible to numerous international business risks that could increase their costs or disrupt the supply of their products.

A significant portion of their sales are to large, multi-national retail partners. If these retail partners cease to carry their current products, choose not to carry new products that they develop or cease operations altogether, their brand as well as their results of operations and financial condition could be harmed. Additionally, they depend on these retail partners to display and present their products to consumers, and their failure to maintain and further develop their relationships with their retail partners could harm their business. For fiscal years 2019 and 2020, approximately 37% and 39%, respectively, of their net sales were made to large, multi-national retail partners. For fiscal years 2019 and 2020, their top national retail partner accounted for approximately 14% and 16% of their net sales, respectively

Sales of counterfeit versions of their products, as well as unauthorized sales of their products, may adversely affect their reputation, business, financial condition, results of operations and cash flows.

They are a holding company and their principal asset after completion of this offering will be their 26% ownership interest in Weber HoldCo LLC, and they are accordingly dependent upon distributions from Weber HoldCo LLC to pay dividends, if any, and taxes, make payments under the Tax Receivable Agreement and pay other expenses.

They are controlled by the Pre-IPO LLC Members whose interests in their business may be different than yours, and certain statutory provisions afforded to stockholders are not applicable to them. The Pre-IPO LLC Members will control approximately 74% of the combined voting power of their common stock (or 71% if the underwriters exercise their option to purchase additional shares of Class A common stock in full) after the completion of this offering and the application of the net proceeds from this offering. Further, pursuant to the Stockholders Agreement, they and the Pre-IPO LLC Members will enter into, the Pre-IPO LLC Members may approve or disapprove their change of control transactions, including mergers or amalgamations, consolidations or a sale of all or substantially all assets and any dissolution, liquidation or reorganization of them or their subsidiaries

They will be a “controlled company” within the meaning of the NYSE rules and, as a result, qualify for, and will rely on, exemptions from certain corporate governance requirements that provide protection to the stockholders of companies that are subject to such corporate governance requirements. Upon completion of this offering, BDT Capital Partners LLC will continue to beneficially own more than 50% of the voting power for the election of members of their board of directors. As a result, they will be a “controlled company” within the meaning of the corporate governance standards of the NYSE rules.

They will be required to pay the Pre-IPO LLC Members and any other persons that become parties to the Tax Receivable Agreement for certain tax benefits they may receive, and the amounts they may pay could be significant.

Bottom Line

Their net sales were $1.34 billion, $1.30 billion and $1.53 billion and their net income was $113.3 million, $50.1 million and $88.9 million in fiscal 2018, 2019, and 2020, respectively. Their net sales were $596.4 million and $963.3 million and their net income was $23.6 million and $73.8 million in the first half of fiscal 2020 and 2021, respectively.

Their founder George Stephen, Sr., established the outdoor cooking category when he invented the original charcoal grill nearly 70 years ago. They have continuously disrupted and led the outdoor cooking category, through a comprehensive and expanding product portfolio including traditional charcoal grills, gas grills, smokers, pellet and electric grills, and recently their cutting-edge Weber Connect™ technology-enabled grills. They believe they offer the most complete outdoor cooking portfolio globally, with their full range of premium products sold in 78 countries in fiscal 2020. They believe Weber is the only outdoor cooking brand with global scale and a vertically integrated manufacturing platform. Their track record of premium product innovation and the strength of their brand has led to a market-leading share of 23% in the U.S. and 24% globally in 2020, according to Frost & Sullivan. Weber Connect brings together cutting-edge grilling technology, a mobile app and a cloud-based infrastructure on a single interconnected platform. Their track record of growth is driven by their iconic brand, massive installed base of loyal enthusiasts, and approximately 26% of their revenues being comprised of accessories and consumables all of which support a predictable, recurring revenue model. They bring their products to market through a diverse and powerful omni-channel network comprised of wholesale, direct-to-consumer (“DTC”) and e-commerce channels. Their wholesale channel is made up of 4,710 retailers with 31,690 physical locations.

According to MetrixLab the installed base of U.S. grills is nearly 70 million units representing 56% penetration of U.S. households. They estimate that more than 30 million of these grills are Weber grills. While they benefit from growth from their installed base, their business is not dependent on replacements. They will continue to grow based on the increasing number of first-time grill buyers; consumers purchasing second grills with a different fuel type; heightened demand for specialty grills such as smokers, pellet grills, electric grills and kamado grills; and additional revenue streams including accessories, consumables and grill services. . The COVID-19 pandemic accelerated certain trends that benefited their industry, and, according to a 2020 survey of grill owners, 85% of grillers globally expect to grill as often or more often after the pandemic than they did before the pandemic. Their TAM is estimated at $49 billion globally and $9 billion in the United States and their SAM is estimated at $15 billion globally and $7 billion in the United States From 2015 to 2020, their SAM grew at a 3.0% CAGR and is projected to grow at a 4.5% CAGR from 2020 to 2025. They expect to grow both TAM and SAM as they expand beyond their current geographies and grow SAM as they introduce new products in their existing verticals and add new verticals to their product portfolio in geographies where they currently operate. As of 2020, they are approximately 7% penetrated in their global TAM and 18% penetrated in their U.S. TAM.

They believe the SmokeFire wood pellet grill will have a similar impact on the pellet industry as their iconic grills have had historically in their respective categories. They also have a long track record of success refreshing products in existing categories, which allows customers to upgrade while staying loyal to the Weber brand. They intend to make Weber Connect available in their charcoal grills and smokers in the future. Weber Connect is an integral part of their connected product pipeline of cutting-edge, technology-enabled grills and devices that will enhance the grilling experience for consumers. They have developed a robust product pipeline that includes tools and cookware, cleaning supplies, multiple fuel types, gear, carts and covers, among others. Innovation in their growing accessory and consumables business will continue to create higher transaction frequency and drive increased consumer loyalty. They also intend to expand their service offerings to capitalize on their best-in-class customer service organization and the global footprint of their Weber branded retail stores and Weber Grill Academy sites to capture new revenue streams. They will continue to leverage their extensive experience and deep expertise to continue to regularly introduce new products that differentiate them from their competition and accelerate their growth. They believe there is a significant opportunity to increase DTC revenue by accelerating site visits and engagement of Weber.com and partnering with their retailers to launch additional Weber branded retail locations and Weber Grill Academy sites in attractive geographies throughout the world. They also expect purchasing to continue to migrate online providing positive tailwinds for their e-commerce channel. . In addition to adding new consumers, they believe they have a sizable opportunity to optimize direct engagement with their existing consumer base and create new sources of revenue. They currently maintain a database of millions of registered consumers; that base, supplemented with new data from sources like Weber.com and their connected products, gives them the ability to personalize marketing, promotional offers and programs to drive increased consumer loyalty. This will open up new revenue streams like incremental accessory sales and new customized subscription services. They believe they have the opportunity to continue to expand into additional growing international markets. They intend to focus on the most attractive markets in Asia, Europe and Latin America. In 2018, they launched their “Fuel the Growth” initiative to improve productivity within their supply chain, focusing on “Make Where They Sell” initiatives and distribution footprint optimization projects. To date, they have achieved over $64 million in gross productivity savings which has resulted in 150 bps of margin improvement and allowed them to increase growth investments. They believe there is a significant opportunity for them to continue to expand their margins.

They are the most recommended brand in the outdoor cooking industry by consumers, according to MetrixLab, with total brand awareness of 87% in the United States, 86% in Germany, 89% in Australia, 74% in Canada, and 76% in France, the five largest grilling markets in the world. They are the only global manufacturer and distributor in the outdoor cooking industry with leading market share in nearly every product sub-category across geographies. Their marketing strategies and recent investments in Weber.com continue to grow their massive community of Weber enthusiasts, with 65 million site visits in 2020 globally, representing an increase of 83% compared to 2019. Alongside this growth in Weber.com, they are rapidly building database marketing initiatives to further enhance their consumer relationships and maximize purchase frequency. Today they continue their legacy of innovation with their SmokeFire wood pellet grills, Pulse electric grills, and their Weber Connect platform. They believe that the Weber Connect platform has set the standard for connected grilling. Throughout the decades, they have maintained an uncompromising approach to exceptional quality and performance. They believe this has allowed them to expand from their roots in charcoal grills to a diverse portfolio across price points and fuel types, including gas grills, electric grills, smokers, pellet grills and accessories, consumables and services. They distribute their products through a diverse and powerful omni-channel platform, consisting of their wholesale, DTC and e-commerce channels. To complement their online presence, they operate a network of 170 Weber branded retail stores globally, which are strategically located in markets where they are leading consumer shifts to popularize the outdoor cooking industry. To further enhance their online presence, they offer their products on the online platforms of their retailer partners and digitally native retailers such as Amazon.com, where they are the number one outdoor cooking brand in the U.S. and capture 29% of the outdoor grill category. They are a vertically integrated manufacturer and the only major outdoor cooking company that maintains a significant U.S.-based manufacturing footprint that is complemented by other manufacturing capabilities throughout the world.  In addition, Weber maintains trusted relationships of more than 15 years with three major grill manufacturers in China and Taiwan to provide flexibility to produce some of their grills, which provides redundant manufacturing of key product lines. The breadth and depth of their supply chain initiatives have been, and will continue to be, a key business focus and source of strong cash flow generation. Their business maintains a strong margin profile driven by their consistent premium pricing strategy, global scale, vertically integrated manufacturing capabilities, operational productivity programs and commitment to value-added product innovations. They are well positioned to continue to execute on their operational excellence initiatives, including their new manufacturing and distribution facility in Poland. Their resilient growth, margin improvement and efficient capital intensity all contribute to their strong free cash flow.

Their ability to understand consumers’ preferences and to timely identify, develop, manufacture, market and sell products that meet customer demand could significantly affect their business. The markets in which they compete are highly competitive, subject to pricing pressure and include numerous other brands and retailers that offer a wide variety of competitive products. They are subject to separate collective bargaining agreements with certain labor unions in the United States, including with respect to employees in their Huntley, Illinois and Palatine, Illinois facilities, and works councils in Europe, as well as various other commitments regarding their workforce. Because they rely on foreign suppliers and they sell products in foreign markets, they are susceptible to numerous international business risks that could increase their costs or disrupt the supply of their products. A significant portion of their sales are to large, multi-national retail partners. If these retail partners cease to carry their current products, choose not to carry new products that they develop or cease operations altogether, their brand as well as their results of operations and financial condition could be harmed. For fiscal years 2019 and 2020, approximately 37% and 39%, respectively, of their net sales were made to large, multi-national retail partners. For fiscal years 2019 and 2020, their top national retail partner accounted for approximately 14% and 16% of their net sales, respectively. Sales of counterfeit versions of their products, as well as unauthorized sales of their products, may adversely affect their reputation, business, financial condition, results of operations and cash flows. They are a holding company and their principal asset after completion of this offering will be their 26% ownership interest in Weber HoldCo LLC, and they are accordingly dependent upon distributions from Weber HoldCo LLC to pay dividends, if any, and taxes, make payments under the Tax Receivable Agreement and pay other expenses. The Pre-IPO LLC Members will control approximately 74% of the combined voting power of their common stock (or 71% if the underwriters exercise their option to purchase additional shares of Class A common stock in full) after the completion of this offering and the application of the net proceeds from this offering. Upon completion of this offering, BDT Capital Partners LLC will continue to beneficially own more than 50% of the voting power for the election of members of their board of directors. As a result, they will be a “controlled company” within the meaning of the corporate governance standards of the NYSE rules. They will be required to pay the Pre-IPO LLC Members and any other persons that become parties to the Tax Receivable Agreement for certain tax benefits they may receive, and the amounts they may pay could be significant.