Billabong continued to build its empire of action sports brands last week, this time adding to its skate hardgoods arsenal that already includes the Element brand by acquiring skate longboard manufacturer Sector 9.
Founders Steve Lake and Dennis Telfer and co-owner Dave Klimkiewicz will stay on in their current roles after the acquisition. Specific terms of the deal were not disclosed, but Billabong reported that Sector 9 is expected to contribute approximately 2% to Billabong International Limiteds sales in the 2009 fiscal year.
Billabong expects net sales for fiscal 2008, which ended June 30, 2008, to grow in the 5% to 10% range, to approximately A$1.29 billion to A$1.35 billion. Should revenues hold flat in that range for 2009, Sector 9 would contribute between A$25.8 million and A$27.1 million to net sales for the fiscal year, or roughly $24.9 million to $26.1 million at current exchange rates. The acquisition is expected to be earnings per share accretive for fiscal 2009.
The deal includes Sector 9s Gullwing trucks brand. The bulk of Sector 9s revenues are generated by skateboard and associated hardgoods sales, while apparel is a small but emerging category.