NIXON ACQUIRED BY AUSSIE SURFWEAR GIANT
ENCINITAS - 12/27/05 - Australian surfwear company Billabong International Ltd expanded in the market for trendy watches with a deal to buy California-based Nixon Inc. in a package deal approximately valued at $93 million.
Billabong said Nixon was a youth-inspired brand distributed in about 30 countries and targeted at the surf, skate and snow board-sports markets.
It estimated Nixon, particularly strong in North American board-sport watches, would contribute at least 5% to 6% of Billabong sales in the 2006-07 fiscal year.
"It gives us a firm foothold in a growth category in which we were under-represented," the Australian company said in a public statement after the acquisition was announced.
"US sales are currently just below 50% of our group sales and we see substantial growth opportunities in America and Europe over the next five years," it said, adding the company "was not looking to further expand its range of categories," which includes such popular brand names as Von Zipper eyewear, Element shoes, Kustom footwear, and Honolua Surf and Mrs. Palmers surf wax and accessories.
Billabong last month bought into the airport-based surfwear retailer "beachculture" as it continues to expand in retailing.
According to media reports, the $93 million purchase price, conditional on Nixon shareholder agreement, involves an initial payment of $73 million and a deferred payment of up to $24 million, depending on future earnings and how long Nixon founders Andy Laats and Chad DiNenna continue to run the brand.
The acquisition is conditional on approval by Nixon's shareholders and regulatory clearance, with those issues expected to be decided by the end of January.
Last year, Billabong reported a net profit of $125.4 million.
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