Quiksilver Inc. has reached a definitive agreement to sell 100% of the
stock of its Cleveland Golf Company Inc. subsidiary to SRI Sports
Limited, based in Japan. The transaction value is $132.5 million and is
expected to close during before January 31, 2008. Net proceeds from the
sale will be used to repay existing indebtedness.
Quiksilver
originally acquired a portion of the interest in Cleveland in its July
2005 acquisition of the Rossignol Group. The remaining interest was
acquired in a separate transaction in September 2007.
This
transaction resulted from Quiksilvers initiative, first announced in
June 2007, to explore strategic alternatives to reduce its exposure to
the hardgoods manufacturing businesses. Robert B. McKnight, Jr.,
Chairman of the Board and Chief Executive Officer of Quiksilver, Inc.,
commented, “We are very pleased to have reached a compelling
transaction with SRI Sports. While we believe that Cleveland is the
best up-and-coming brand in the golf market with significant growth
opportunities, it is not a strategic asset for us as we strive to
maximize our core businesses and brands.”
Bernard Mariette,
president of Quiksilver, Inc., commented, “We believe this transaction
is a key strategic action for our company that will drive immediate
value and enable us to reduce both our exposure to the hardgoods space
and our degree of leverage. We are pleased to turn over the leadership
of Cleveland to such a capable and well-respected company and believe
that this transaction is a clear win for everyone involved.”
Ryochi
Sawada, chairman of the board of SRI Sports Limited, commented, “We are
very excited to add the Cleveland brand and business to our operations.
Cleveland has a clear position of dominance in the important wedge
market and a fast-growing presence in drivers and irons. We believe
that this business will prove highly complementary to our own. We are
looking forward to demonstrating Clevelands full potential to the
market and believe that the business can benefit greatly from our
stewardship.”
Greg Hopkins, president of Cleveland Golf Company,
Inc, commented, “We are excited by the many positive aspects of this
deal, including the combination of a great brand in golf with a new
organization that is completely and solely devoted to the sport.
Significantly, their operating model is set up to anticipate and
respond to the seasonality and other specific requirements of the golf
market. We believe that this singular focus will benefit the entire
Cleveland organization in a number of ways. Each of the three companies
involved – Cleveland Golf, Quiksilver, and our new parent SRI Sports
benefit in significant ways as this transaction will positively effect
the futures of all three companies.”
Commenting on Quiksilvers
remaining hardgoods brands, Mr. Mariette continued, “We remain fully
committed to our vision to transform Rossignol to a global lifestyle
brand and therefore to the continued ownership of the related hardgoods
assets.” Mr. McKnight added, “We are continuing to evaluate ways to
reduce our exposure to risk in some of our non-core winter equipment
businesses, including Dynastar, Lange, Look, Kerma and Risport which,
like Cleveland Golf, were acquired in 2005 as part of the Rossignol
Group.”
