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Warnaco Finalizes New Deal

The $40 million takeover of the surfing apparel maker marks an exit for Doyle & Boissiere.

In a bid for a piece of the surf and beach wear market, Warnaco Group Inc. said Wednesday, Aug. 4, it has agreed to acquire Ocean Pacific Apparel Corp. for $40 million in cash from Burlingame, Calif.-based private equity fund Doyle & Boissiere Fund I LLC.

"We think it's a nice, complementary and strategic acquisition, and we're looking forward to growing the business," said a Warnaco spokeswoman.

New York-based Warnaco will assume $1 million in debt, and there is an earnout provision, but the spokesman declined to release further details.

The deal is expected to close in the third quarter.

Ocean Pacific, which operates through a network of licensees, offers a broad spectrum of apparel and accessories for men, women, young adults and children under its Op, Ocean Pacific, Op Classics and Seven 2 labels. Big name surfers such as Kelly Slater, Lisa Andersen, Tom Curren and Taylor Knox have sported its fashions.

"We're pleased with the fit between Ocean Pacific and Warnaco," said Bill Doyle, managing member of Doyle & Boissiere. "We're optimistic that the business will continue its strong performance and growth."

Doyle & Boissiere acquired Ocean Pacific in 1998 for an undisclosed sum from Berkeley International Capital Corp. Doyle declined to comment on the firm's profit from the sale.

As part of the deal, Ocean Pacific president Dick Baker, who breathed life back into the foundering company after investing alongside Doyle & Boissiere, will join Warnaco and remain president of Ocean Pacific.

Ocean Pacific, which filed bankruptcy in 1992, expects to generate $250 million in wholesale sales this year, according to Women's Wear Daily.

"From a trend perspective, the larger apparel aggregators are looking for lifestyle brands that can appeal to a large market," said Paul Altman, a vice president at The Sage Group, financial adviser to OP and Doyle & Boissiere. "The California lifestyle is no longer just for surfers but for people who want to be fashionable and up on the latest trends."

Sage’s managing director and CEO Mark Vidergauz and vice president Frederick Schmitt also worked on the sale.

Warnaco shares fell slightly to $18.29 by midday from Tuesday's close of $18.31.

Costa Mesa, Calif.-based law firm Rutan & Tucker LLP partner George Wall was legal counsel to Doyle & Boissiere.

Warnaco did not use outside legal or financial counsel.

The Sage Group acted as exclusive financial advisor to Ocean Pacific Apparel Corp.