Boardriders, Inc., the parent company for Quiksilver, Roxy and DC shoes, has agreed to acquire rival Billabong International Ltd. (including subsidiaries RVCA, Element, VonZipper, and Xcel) for +/- $315 million (including debt); forming “the world’s leading action sports company.” Together the surf, skate and snow retailer will generate more than $2 billion in sales and have more than 600 retail stores in 28 countries. David Tanner, Managing Director at Oaktree Capital Management (OAK), L.P. will assume the role of CEO upon close of the transaction; expected to occur in H1 ’17.
Howie Long-Short: Oaktree Capital Management (OAK) now owns Billabong in its entirety. The company had acquired 19% as part of a $360 million refinancing deal in ’13 and will now receive the balance through its 85% ownership in Boardriders; formerly known as Quiksilver. In ’15, Quiksilver filed for Chapter 11 bankruptcy; emerging in ’16 having been “dramatically restructured” under a $175 million investment from Oaktree Capital Management. The company has since invested in e-commerce and digital growth, while returning to profitability.
Fan Marino: BLLAY shareholders may have mixed feelings on the sale price. On one hand, at $1/share the price represents a 28.2% premium to the stock price prior to news of the offer breaking (on Dec. 1). On the other, in 2012 BLLAY turned down a takeover bid worth 4x more than the agreed upon sale price for this transaction. For comparison purposes, streetwear brand Supreme recently sold 50% of the company for $500 million.
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