Milan, Italy-based BasicNet Group, owner of the Kappa, Robe di Kappa, K-Way, Superga, Sebago, Briko, and Woolrich brands, continues its expansion, reaching an agreement to acquire the Sundek beachwear brand from Kickoff S.p.A., the current brand owner, from Winnie S.r.l.
“Founded in San Francisco in 1958, Sundek was among the first brands to shape surfwear, becoming one of the key players in the emerging Californian surf culture,” BasicNet said in a media release announcing the deal. “Not simply technical apparel, but a true symbol of a lifestyle: freedom, counterculture, music, a rebellious spirit, and community. In the 1960s, the brand expanded from the California coast to Hawaii and then along the East Coast, accompanying — and often anticipating — the evolution of surfing as a cultural reference. 1972 marked an iconic moment with the creation of the Rainbow Boardshorts: quick-dry nylon, seamless, and the unmistakable rainbow on the back. A garment that transcended beachwear to become a distinctive sign of identity, style, and belonging to surf culture.”
The acquisition of Sundek is expected to enable BasicNet S.p.A. to bolster its portfolio with another brand that aligns with the Group, in a category (beachwear) that is not represented. “Sundek is a brand that seemingly reflects the qualities required to become part of the Group: history, iconicity, color, and strong recognizability,” the company said.
Kickoff Group reported closing the 2024 financial year with revenues of €27.6 million and EBITDA of €6.8 million. The Group also notes that it operates 27 single-brand stores in Italy, including eight monobrand stores, as well as seven monobrand stores in Spain, France and the U.S.
BasicNet reported that the Enterprise Value of Kickoff Group, which also includes the companies Kickoff USA, Inc., Kickoff SL and Kickoff France Sas, has been set at €33.5 million. net of the financial position, which includes bank debt, tax payables, and debt owed to shareholders, the initial consideration for the transaction amounts to approximately €10 million, subject to standard adjustments based on the final calculation of the net financial position at closing, expected by the end of December.
The initial consideration will reportedly be paid entirely through the transfer of treasury shares already held in its portfolio, valued at the average price over the last six months of trading from today (approximately 1.386 million shares, valued at €7.22 per share). Standard adjustments, if any, may be settled, at BasicNet S.p.A.’s discretion, entirely or partially in cash or through the transfer of treasury shares, using the same valuation applied to the initial consideration, the company outlined.
The treasury shares transferred by BasicNet S.p.A. to the counterparty as initial consideration will be subject to a 36-month lock-up period from the completion date of the acquisition, with partial releases starting from the second year.
In addition to the initial consideration, one or two earn-outs, each of €5 million and up to an aggregate maximum amount of €10 million, may also be paid and will be owed by BasicNet upon the achievement of revenue thresholds of the Sundek brand in any financial year after 2025 and until December 31, 2030. The revenue thresholds considered for the Sundek brand are €40 million and €50 million. For 2030 only, if the Sundek brand’s revenue exceeds €40 million but is lower than €50 million, the earn-out relating to the first threshold will be calculated by applying the ratio of the amount exceeding €40 million to €10 million to €5 million.
The company said that any amount due as earn-out may be settled, at the discretion of BasicNet S.p.A., entirely or partially in cash or through the transfer of treasury shares valued at the average price of the last six months of trading prior to the approval date of the financial statements exceeding the Sundek brand revenue threshold. The treasury shares transferred by BasicNet S.p.A. to the counterparty as earn-out will be subject to a 12-month lock-up period from the date of transfer.
BasicNet Group has not taken on new debt to finance the acquisition, if it expects to refinance the existing medium- and long-term credit lines of Kickoff Group.
The transaction is not subject to any condition precedent.
As part of the transaction, BasicNet S.p.A. was assisted by Studio Legale Pavesio for contractual and legal due diligence, by Studio Sindico e Associate for intellectual property due diligence, and by Deloitte for tax and financial due diligence.
Kickoff Group was assisted by Studio SR Consulting as financial advisor, represented by Drs. Gian Luca Lanzotti, Simone Clementelli and Carmelinda Bottaro, and by Studio Bonelli Erede as legal advisor, represented by Attorneys Angelo Bonetta and Maria Milanese.
Image courtesy Sundek USA/Kickoff Group
