Columbia Sportswear Company has entered into a definitive merger agreement to acquire Mountain Hardwear Inc. for aggregate consideration of approximately $36 million, including approximately $30 million in cash and $6 million of debt assumption.
The merger is subject to approval by the shareholders of Mountain Hardwear and is expected to close on March 31, 2003.
Mountain Hardwear designs, develops and markets the most technically advanced equipment and apparel available to outdoor enthusiasts and professionals, many of whom are icons in the global mountaineering community. Mountain Hardwear, which is based in Richmond, Calif., recorded an unaudited $31.4 million in revenue during 2002. Upon closing, the company will be a wholly owned subsidiary of Columbia Sportswear.
Columbia Sportswear CEO Tim Boyle commented, “By acquiring Mountain Hardwear, we continue to build a dynamic portfolio of strong outdoor brands. We are committed to upholding Mountain Hardwear’s brand integrity and authenticity for the benefit of its intensely loyal consumer base. Mountain Hardwear will continue to operate as an independent brand.
“Backed by Columbia’s financial strength and operating expertise, the Mountain Hardwear brand provides Columbia the opportunity to profitably increase sales by up to $100 million over five years. Our growth strategy for Mountain Hardwear includes further penetrating high-end specialty retailers, expanding its current product offering, expanding international distribution, and selectively broadening retail distribution of its products consistent with its specialty store heritage and authentic brand and consumer base. Over time, we plan to integrate sourcing and distribution functions, which should provide us with the opportunity to increase efficiencies and expand gross and operating margins for both companies.”
Mountain Hardwear President Jack Gilbert, Vice President of Design and Sourcing Paul Kramer, and Vice President of Sales and Marketing Mike Wallenfels will remain executive leaders of the company they founded in 1993. Mountain Hardwear’s employees, many of whom were also involved in founding the company, will remain at the company’s headquarters in Richmond, Calif.
“We needed a corporate partner who agreed that pushing the limits of what is technically possible is the essence of our success, and who is committed to fueling that vision,” said Gilbert. “This transaction marks a significant milestone in the development of our business, and gives us the opportunity to continue building the Mountain Hardwear brand on a global scale. Columbia understands the unique value, positioning and integrity of the Mountain Hardwear brand, and together we are committed to providing leading edge apparel and equipment to outdoor enthusiasts and professionals.”
RBC Capital Markets represented Mountain Hardwear in the merger.