Shares of Black Diamond Inc. closed Friday up nearly 5 percent on more than 2.5 times average trading volume after it offered 7.75 million shares of stock for sale.
Shares closed at $8.06, well above the $7.50 offering price. The issue is expected to raise at least $58 million. BDE said it will use $25 million in proceeds to pay down the outstanding balance on a line of credit with Zions Bank. The balance of proceeds will be used for general corporate purposes and capital expenditures, including infrastructure the company needs to launch its inaugural apparel line in the fall of 2013. Proceeds could also be used to finance acquisitions.
Black Diamond estimated last week that its sales grew 16 percent to $145 million last year and the company wants to add $250 million in sales annually by 2015 through acquisitions and another $250 million annually by 2020 through sales of apparel. The company plans to launch its first apparel collection in the fall of 2013.
President and CEO Peter Metcalf has been in talks since last summer with potential acquisition targets in the outdoor recreation space. Metcalf said the company is focused on brands with $25-$50 million in annual revenue.
“We will target acquisitions that will enable us to gain access to new product categories, geographies and channels and increase our penetration of existing markets,” reads the prospectus the company filed Wednesday for the offering. “We have identified a number of potential targets that include tuck-ins, brand acquisitions and strategic targets that we believe represent a sales growth opportunity of approximately $250 million by 2015. We believe our management’s experience in identifying attractive acquisition targets, our proven integration process and our global infrastructure creates a strong platform for future acquisitions.”
