Sport Brands International, the parent company to Fila, finalized a deal with outdoor apparel-maker Cloudveil that has been several months in the making. Cloudveil Mountain Works, Inc. is now a division of SBI with all Cloudveil management, customer service and sales personnel remaining in place. Details were not disclosed, but sources close to the deal said that it was in-line with the current market which has been producing deals at roughly 7.5x to 8x EBITDA or 1x to 1.2x sales.

Steve Wynn, president and CEO of SBI, told Sports Executive Weekly that it was SBI’s hope that the company stays intact. “The job they have done with the resources they had is phenomenal,” he said. “Brands are successful when consumers can sense the passion for the brand. The Cloudveil team has that passion.”

Both Cloudveil and SBI see international expansion as the biggest opportunity for the brand. Cloudveil has been established in Japan for some time and has distribution agreements in Korea, The U.K., and Ireland, but the company has had a goal of establishing itself in the continental European Union for several years. Wynn agreed that international is the biggest long-term opportunity for Cloudveil. “There is truly a global market for what they do,” he said.

“We have really just started to dabble in the international market – the EU is a key element for us,” said Stephen Sullivan, Cloudveil’s co-founder who will stay on as global brand manager. “Now, we have access to SBI’s offices in Europe, and we will be attending ISPO with a booth for the first time this year.”

Cloudveil has been growing rapidly since its inception, with 79% sales growth in 2003, and another 78% gain in 2004. At the close of 2004 the company had 260 specialty dealers with product in 300 doors across the country. Cousins said that with the recent vertical launch of the brand’s ski wear collection, 2005 will be even stronger with an increased slope-side presence.

“This is easily our best year ever in terms of sell-through… Financing growth like we have experienced over the past few years is very difficult,” Sullivan told BOSS. “One of the best things for us in this deal is the product development and supply chain resources we will have available. This will allow us to bring better products to the market faster.”

Mr. Wynn said that the Cloudveil deal is another piece in SBI’s mission to build a diversified portfolio that is synergistic in nature. He said they will be interested in making similar acquisitions that make sense for that strategy. “We’ll look at things across the sporting goods platform,” said Wynn. “We’ll look at other things that complement the current Cloudveil and Fila position in the market.” Asked if footwear could be part of the equation for Cloudveil in the future, Wynn quipped that it’s “in the back of our minds.”