Kiwi outdoor leisure and apparel company, Kathmandu is to acquire iconic Australia-founded global surf brand Rip Curl for $NZ368m.
The companies have entered into a takeover agreement and the deal will be financed through a fully underwritten "accelerated entitlement offer" to raise $NZ145m.
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Approximately NZ$32m of new Kathmandu shares will be issued to the founders and CEO of Rip Curl as part of the agreed consideration for the purchase, with $NZ231m funded through underwritten debt facilities.
Xavier Simonet, chief executive of Kathmandu said that the combination of Kathmandu, Oboz footwear and Rip Curl creates a global outdoor and action sports company, generating over $NZ1b of revenue.
"The combined group will have a deeper and more meaningful global presence, with a combined footprint of 341 owned retail stores, 254 licensed stores and over 7,300 wholesale doorways globally," Simonet said.
The acquisition will create opportunities to drive scale benefits and offer seasonal balance through Rip Curl's beach-loving, summer focus, together with Kathmandu's outdoor, winter focus.
Founded in 1969 by Brian Singer and Doug Warbrick, Rip Curl is a designer, manufacturer, wholesaler and retailer of surfing equipment and apparel, including wetsuits, boardshorts, swimwear and watches.
Michael Daly, chief executive of Rip Curl said that the surf and beachwear retailer is excited about the opportunity to partner with a company that shares a vision for creating high quality, functional products for outdoor and action enthusiasts.
We look forward to continuing to grow the Rip Curl brand as part of the Kathmandu Group," Daly said.
Daly will continue to lead Rip Curl from its headquarters in Torquay, reporting to Simonet.
Speaking of the opportunity for the combined brands, Simonet acknowledged the role that Rip Curl's founders have played in building the brand as an international player with a unique cultural identity.
"We're pleased that the founders and CEO wish to remain invested in the ongoing success of Rip Curl under Kathmandu ownership," Simonet said.
Under the new Kathmandu Group, current expectations are that each is expected to retain operational ownership of their respective businesses, with consideration of how certain support functions can be shared for cost benefits.
The group aims to protect the strong identity and cultural values associated with each of the Kathmandu, Oboz footwear and Rip Curl brands.
For outdoor lovers and action-seekers wanting a wider choice, Simonet said that the company will "leverage combined expertise to advance and expand high-quality ranges."
The takeover is subject to shareholder approval, for which a meeting is scheduled in October. If approved, the sale is expected to be completed by the end of 2019.