Nautilus, Inc. has agreed to sell its Pearl iZumi apparel and footwear segment to Shimano American Corporation, a division of Shimano, Inc. The transaction value of $69.5 million is comprised of $65.3 million in cash and the assumption of $4.2 million in long-term debt, and is subject to adjustment for net working capital. Pearl Izumi becomes a wholly owned subsidiary of Shimano’s U.S. operations, and will continue to operate from its facilities in Broomfield, Colorado and Kirchzarten, Germany…


 


Shimano’s acquisition includes Pearl Izumi’s facility in Kirchzarten, Germany, and the rights to Pearl Izumi sales and distribution throughout North and South America, Europe, Australia and select other countries. Pfeiffer notes the purchase does not include sales and distribution rights of Pearl Izumi branded products in Japan and most of Asia.


 


The transaction is expected to close by March 31, 2008, and is contingent upon normal regulatory approval and customary closing conditions.


 


“The acquisition brings together two companies started by Japanese families who share a passion for cycling,” said David Pfeiffer, president of Shimano American Corporation.


 


“Both have strong research and development backgrounds, offer industry leading innovations, and share an obsession with quality and performance. We’ll continue to build the respective brands and remain dedicated to the healthy independent dealer networks we’ve both enjoyed.”


 


Pfeiffer also noted that Pearl Izumi would be maintained as a stand-alone company with its own management team.


 


“Pearl Izumi is a leader in the performance sports apparel and footwear market, and we plan to keep them in that position,” Pfeiffer said. “Pearl Izumi’s design expertise creates products for the avid cycling and running enthusiasts and we’ll provide Juergen Eckmann (Pearl Izumi’s president) and his team with all of Shimano’s support and resources needed to continue that tradition.”


 


Eckmann added, “The entire team at Pearl Izumi USA and Europe are excited about opportunities and benefits we gain in becoming part of Shimano. Shimano provides knowledge and expertise which will make our brand stronger and we in turn have a great deal of experience in performance apparel, fabric technologies and run footwear that Shimano did not previously possess.”


 


Pfeiffer said that Shimano will continue to offers its branded apparel and cycling footwear along with the Pearl Izumi apparel and cycling footwear in all markets.


 


Nautilus announced in October 2007 that its apparel business would be offered for sale.  The company acquired Pearl iZumi USA in 2005.


 


“We believe this divestiture is in the best interest of shareholders by providing liquidity and keeping our organization focused on restoring profitability to our global fitness business,” said Bob Falcone, President and CEO of Nautilus. “Pearl iZumi is an excellent brand of apparel and footwear for cycling and running. We are pleased to have found a strategic buyer in Shimano that values the brand as well as our talented apparel and footwear staff.”


 


Nautilus is being represented by Wachovia Securities.