Quiksilver To Purchase DC Shoes
Huntington Beach-based surf-inspired apparel maker Quiksilver Inc. agreed to acquire privately held DC Shoes Inc. in a deal worth approximately $88 million in cash and stock.
DC Shoes, based in Vista, designs and distributes footwear and apparel inspired by action sports such as skateboarding and snowboarding. the company had more than $100 million in sales in 2003. Quiksilver reported $975 million in revenues in 2003.
The terms of the agreement include Quiksilver paying $57 million in cash for the company, issuing 1.6 million restricted shares of Quiksilver common stock and assuming approximately $10 million in debt.
Quiksilver stock closed at $19.80 on Monday.
In addition, sellers may receive up to an additional $57 million over the four years through 2007 if DC Shoes reaches certain performance targets.
Quiksilver believes the purchase will be mildly accretive to earnings per share in the current year and estimates it will improve earnings per share by 6 cents in fiscal year 2005. The deal is expected to close in the third quarter.
Quiksilver is being advised by Citigroup Global Markets Inc. The Sage Group is advising DC Shoes.
The Sage Group acted as exclusive financial advisor to DC Shoes.