Black Diamond Inc. has sold Swedish skiing and cycling accessories maker POC for $65 million to Investcorp, a global provider and manager of alternative investment products.
For the 12 months ended December 31, 2014, POC recorded sales of approximately $34.8 million, implying a revenue multiple of approximately 1.9x. Black Diamond originally acquired POC in July 2012 for approximately $44.9 million.
The divestiture completes a strategic review process Black Diamond initiated in March 2015, when it announced it would shop all three of its brands at a time of high multiples. Going forward, the Salt Lake City-based company “plans to maximize shareholder value by focusing its attention on the profitability of both the Black Diamond Equipment and PIEPS brands while redeploying the proceeds of the sale to potentially unrelated and diversifying investments.”
The announcement dispels speculation that former Black Diamond director Philip Duff might acquire POC and merge it into Assos, a cycling apparel company. Assos named Duff its CEO September 17 after he acquired a majority stake in the company.
The POC sale also discredited an October 1 report that Black Diamond's search for buyers had come up empty.
Black Diamond said it will provide a full strategic and financial update on its third quarter earnings call in early November. The deal follows last week's unattributed report that Investcorp continues its long history of involvement with consumer sporting businesses in Europe, both apparel and gear, with Riva Boats, its first European investment in 1984, followed by Helly Hansen, Dainese, AGV and now POC.
Black Diamond expects to realize net proceeds of approximately $60.0 million after purchase price adjustments, fees, expenses and taxes. Post-transaction, the Company expects to have approximately $100.0 million in cash, $22.6 million in debt and around $167.0 million in net operating loss carryforwards.
“We would like to thank all of our employees and partners for their work in building POC into one of the most innovative, fastest-growing and hottest brands in the action sports protective gear market,” said Peter Metcalf, CEO, Black Diamond. “We are proud of the reputation POC has built around safety and protection for gravity sport athletes, and are also confident in its bright future under Investcorp’s portfolio, which includes Dainese, the most recognized and respected brand for safety and quality in dynamic sports markets.”
Rothschild Inc. and Robert W. Baird & Co. served as financial advisors, and Kane Kessler, P.C. served as legal advisor to Black Diamond for the divestiture and strategic review process.
Established in 2004 and headquartered in Sweden, POC's quest is to provide athletes and consumers with the highest standard of personal protection. POC's line of products includes helmets, body armor, goggles, eyewear, gloves and other gear, which are currently sold across 27 countries worldwide. Through technical collaboration with partners such as Volvo and Ericsson, POC is pioneering innovative safety concepts.
The company also partners with leading athletes as it strives to be at the forefront of technical advancements. Athletes include the American World Cup alpine ski racer and Olympic gold medallist, Julia Mancuso, who has partnered with POC to develop a signature collection. Collaborations with leading road bike teams, such as Team Cannondale-Garmin and Team Stolting, ensures POC is at the vanguard of developing products famed for safety, comfort and aerodynamics for the rapidly growing road bike market.
This acquisition comes almost a year after Investcorp acquired the specialist gear and protection maker Dainese, the most recognized and respected brand for safety and quality in motorcycle and other dynamic sports markets. There are synergies between the two businesses that will be explored in the future.
“POC is one of the fastest growing, dynamic and innovative companies in the sports gear and protection sectors,” said Gilbert Kamieniecky, principal of Investcorp's European Corporate Investment group. “Its cross generational reach, intrinsic focus on technical innovation and commitment to safety make it the perfect fit for our portfolio. Leveraging our sector expertise, experience of working with high quality brands and industry connections, we believe Investcorp is well placed to further support POC's already impressive growth trajectory.”
Stefan Ytterborn, POC founder, said, “We are delighted to be partnering with Investcorp in the next stage of our development. I am confident that with their support we will continue to grow sales, increase penetration into new markets and drive forward innovation, while not deviating from our ultimate mission of doing the best we can to possibly save lives and reduce consequences of accidents for gravity sports athletes and cyclists.”
Gattai, Minoli, Agostinelli & Partners served as legal advisor and DC Advisory served as financial advisor to Investcorp.
Investcorp is a leading provider and manager of alternative investment products and is publicly traded on the Bahrain Bourse (INVCORP). The Investcorp Group has offices in New York, Bahrain, London, Saudi Arabia and Abu Dhabi. Investcorp has three business areas: corporate investment in the U.S., Europe and the Gulf, real estate investment in the U.S and global hedge funds. As at June 30, 2015, the Investcorp Group had $10.6 billion in total assets under management ('AUM'), including assets managed by third-party managers where Investcorp receives fees calculated on the basis of AUM.
