It was a busy and a good week for the outdoor and snowsports industries with five acquisitions, including two that could restore the luster of authentic brands hindered in recent years by botched acquisitions. The deals came in several flavors, including a PE firm selling a brand to a public company, a public company selling a brand back to the founders with PE help, a PE firm selling a company to another PE company and a public company acquiring a retailer.

Dorel Acquires Cannondale, Looks for more in IBD channel The week kicked off with Dorel announcing it would pay Pegasus Capital Advisors between $190 million and $200 million to acquire Cannondale Bicycle Corp. Dorel formed the Cannondale Sports Group, which will include the Cannondale, Sugoi and GT brands, and said it will be the crown jewel of a new Independent Bicycle Dealer Division. Cannondale will increase Dorel's earnings per share in the 9 cents range this year, the company estimated. The higher margin IDB business will complement Dorel's Pacific Cycle business, where the loss of a single retailer can materially affect sales.

Co-founders buy back prAna The week's second high profile deal involved Beaver Theodosakis and his co-founders taking back prAna from Liz Claiborne with help from PE firm Steelpoint Capital Partners in a management lead leveraged buyout. prAna was acquired by Liz for $34.4 million in November 2005 as a first step toward building a coalition of young lifestyle brands that would span the outdoors, surf and boarding cultures. But just five months after the deal, Liz appointed a new CEO who promptly ordered a review of 16 of the company's 36 brands in the wake of declining department store sales. Last week, after seven months of due diligence with ten bidders, Liz announced it had sold the company back to its co-founders for $40.5 million. Under an earnings payout formula that was part of the 2005 deal, Liz will pay the founders $18.4 million.

Cloudveil Caught in Spyder’s Web… The industry's other big deal was Spyder Active Sports, Inc.'s acquisition of Cloudveil Mountain Works, Inc. Like prAna, Cloudveil has been put through the due diligence ringer in the year since its owner Cerberus Capital Management, L.P. put it up for sale as part of a reshuffling of the portfolio at Sport Brands International. SBI acquired Cloudveil in 2005 at a time when its sales were growing nearly 80% per year. Spyder meanwhile was acquired in 2004 by Apax Partners, which advises private equity funds controlling $35 billion. The deal gives Spyder a foothold in the outdoor specialty channel, which is three to four times larger than the specialty ski channel where it now resides. Cloudveil is best known for inventing the softshell and its growing spring/summer line, including a new fly fishing line, which now comprises about 30% of its sales, said President Brian Cousins. The company will immediately contribute to Spyder's earnings, Spyder management said. Sources familiar with the Cloudveil sale said the company's sales were $18 million in 2007. Cousins said sales growth at Cloudveil has maintained over the last three or four years at 40%, down significantly from the nearly 80% it was reporting as recently as 2004.

Burton Adds Skate DNA to its Portfolio…Burton Snowboards was the other authentic snowsports brand to add to its portfolio last week. The company, which has said it plans on becoming a player across all board sports, acquired skateboarding company DNA Distribution. DNA will continue to operate in Dayton, OH and CEO and Co-Founder Chris Carter will continue to oversee the DNA brands, which include Alien Workshop, Habitat and Reflex Bearings. Terms of the deal were not disclosed.

The deal marks Burton's second investment outside snowboarding since July 2006, when it acquired the assets of Channel Islands Surfboards. In that deal, the plan was to keep the two brands separate, but look for back-end synergies in sourcing, purchasing, international distribution and R&D.

Apparel Company Eyes Specialty Retail…Squeezing in one more deal was Nitches, a public company that acquired Midwest retailer Backwoods Equipment Company. Austin, TX-based Backwoods operates eight outdoor specialty stores and a growing adventure travel business. The deal was structured as a stock swap with Backwoods becoming a wholly owned subsidiary of Nitches.

Nitches will expand Backwoods' store locations and its subsidiary NAP, Inc. will create and develop a Backwoods Collection of lifestyle clothing that will become available in June. NAP will pursue wholesale, licensing and international opportunities with the brand.

Sun Capital Acquisition of  Kellwood Appears Imminent…Kellwood Company entered into a merger agreement with Sun Capital providing for a prompt merger if Sun Capital's tender offer is successful on February 12, 2008. The KWD Board of Directors is now recommending that stockholders tender their shares into the offer.

The merger agreement provides that once shares are paid for in the tender offer, Sun Capital will take control of the Kellwood Board of Directors.

Sun Capital's offer represents 7.7 times Kellwood's trailing-twelve-month EBITDA, 21.2 times its 2007 estimated earnings per share, and 14 times its estimated earnings per share for fiscal 2008.