New Wave Group AB of Sweden acquired the rights to distribute its Craft performance apparel brand in the United States and Canada from Karhu North America LLC of Beverly, MA.
The acquisition, which was made through New Wave's new US subsidiary, includes the purchase of inventory, certain intellectual property and contract rights. The transaction is structured as an asset acquisition. The initial purchase price amounts to $3 million with an additional contingent price based on the results of the business over the next five years that can not exceed $4.75 million.
Three Karhu employees will transfer in connection with the acquisition. Because the acquired business has been operated within Karhu's other operations, no separate audited sales and earnings statements are available for the Craft distribution business. Based on pro-forma information, the acquired business achieved sales of approximately $6.9 million during the financial year 2012.
New Wave Group anticipates that the transaction will result in the realization of additional annual EBITDA of approximately US$ 700,000.
The acquired business will be managed by a newly founded US company: Craft Sportswear North America LLC; an indirect wholly owned subsidiary of New Wave USA Inc. The present CEO of Karhu, Huub Valkenburg will continue as CEO of the new company, which will still be operated and headquartered in Beverly, MA. Valkenburg founded the Craft distribution business in North America in 1999.
New Wave Group believes that the new acquisition and structure will form a strong basis for a further expansion of the CRAFT-brand in the US and Canada during coming years.
“We are very proud to have established Craft as a performance apparel brand in North America driving a profitable sustainable business and look forward to growing the brand even more in the years to come,” said Valkenburg, new CEO of Craft Sportswear North America. “As owners of the Craft rand, we are very pleased with the acquisition and believe that this will give New Wave Group a good basis for expanding Craft in the US and Canada,” said Torsten Jansson, CEO and president of New Wave Group.
New Wave Group AB, which is listed on NASDAQ OMX Nordic Exchange in Stockholm, designs, acquires and develops brands and products in the corporate promotions, sports, gifts and home furnishings sectors. New Wave Group AB through its US subsidiary owns several businesses in North America including Cutter & Buck, Ahead, Inc. and Paris Glove.
