Listed outdoors retailer Kathmandu has announced that it will acquire surfwear company Rip Curl in a takeover worth $350 million, as it looks to diversify its product offering and global reach.
In a statement to both the ASX and New Zealand’s NZX (given the retailer is listed on both sharemarkets), Kathmandu announced on Tuesday (1 October) that it would acquire 100 per cent of Rip Curl Group.
According to Kathmandu, the takeover creates a global outdoor and action sports company worth around $NZ1 billion.
The retailer said the acquisition “provides the opportunity for Kathmandu to considerably diversify its geographic footprint, channels to market and seasonality profile”.
Rip Curl founders Brian Singer and Douglas Warbrick, who founded the Australian brand in 1969, will take part of the buyout as $NZ32 million worth of newly issued Kathmandu shares.
Kathmandu will fund the remainder of the takeover by way of a $NZ145 million share raising and the rest by way of secured debt.
“Rip Curl is an iconic Australian global action sports brand, and a designer, manufacturer, wholesaler and retailer of surfing equipment and apparel,” Kathmandu said.
“Born in Bells Beach, Australia, in 1969, Rip Curl has a rich history synonymous with surfing, sponsoring some of the sport’s world-class athletes and premier global competitions.”
It said the new combined group will have 341 company-owned retail stores and 254 licences stores, as well as “over 7,300 wholesale doorways globally”.
The company added that the predominantly summer-focused surf beach gear sold by Rip Curl will balance Kathmandu’s largely winter and outdoor-focused product line-up.
Kathmandu will also seek to leverage Rip Curl’s established presence in the North American and European markets for future growth.
“This is a fantastic opportunity for Kathmandu to grow and diversify,” said Kathmandu’s CEO, Xavier Simonet.
“The combination of Kathmandu, Oboz and Rip Curl achieves diversification in product, channel, geography and seasonality, and creates a platform for the acceleration of our brands’ global expansion into new channels and markets.
“Importantly, there is also strong cultural alignment between our brands, underpinned by a shared focus on quality, innovation and sustainability.”
Rip Curl CEO Michael Daly, who will also benefit from a package of Kathmandu shares, will continue to lead the business under its new parent company.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.
Ask the Experts: Business assets and liability after separation
By Anneka Frayne
Anxiety in the workplace
By Staff Reporter
Managing ‘sleeper issue’ of directors’ GST risks
By Jim Koutsokostas