New Zealand based outdoor and adventure wear retailer, Kathmandu will become a $NZ billion-dollar market value company once it tucks away Australian surfwear icon, Rip Curl.
In a surprise announcement yesterday Kathmandu revealed it was paying $350 million for Rip Curl in its biggest expansion move yet.
The $30 million cost will be financed financed through a combination of a fully underwritten 1 for 4 pro-rata accelerated entitlement offer to raise $NZ145 million ($A90.80 million) and a placement of about $NZ32 million of new Kathmandu shares to the founders and chief executive of Rip Curl, who will receive a part of the consideration in Kathmandu shares.
The remainder of the purchase price will be financed by a newly established senior debt facility.
Kathmandu, which is based in the NZ city of Christchurch, sells apparel and gear in the travel and adventure segment, operates stores in New Zealand, Australia, and Britain.
Rather than a sale this is one of the few big purchases in Australian retailing in the past year or so, marking out Kathmandu to be a rare success story amid the gloom in the sector with weak sales and consumer spending hitting all parts – from food to fashion to shopping malls and especially margins and earnings.
Rip Curl, which has a presence across Australia, New Zealand, North America, Europe, South East Asia, and Brazil, offers surfing-related products including highly technical wetsuits, boardshorts, and other accessories. It started in Torquay in southwest Victoria and will remain there
Rip Curl chief executive officer Michael Daly will continue to lead the firm and will report to Kathmandu CEO Xavier Simonet.
Kathmandu said yesterday the acquisition will give the dual-listed retailer “seasonal balance”, diversifying its winter/outdoor portfolio with Rip Curl’s summer/beach offerings.
“The acquisition of Rip Curl transforms Kathmandu into a $NZ1.0 billion outdoor and action sports company, anchored by two iconic global Australasian brands,” MrSimonet said.
“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.
Kathmandu shares went into a trading halt yesterday to allow it to complete the entitlement offer.
But Kathmandu investors must first tick off the deal at a shareholders meeting scheduled for October 18.
