Quiksilver acquires DC Shoes

The Oz-to-US surf togs company has announced an agreement to acquire the US BMX/skate shoe company in a $56m cash plus shares deal. DC is the shoe sponsor of Dave Mirra and is famous for giving its key athletes rapstar-style diamond-encrusted DC-shaped rings.
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DC Shoes, Inc's turnover in 2003 was $100m. It is owned by founders Ken Block and Damon Way of Vista, California.

Quiksilver, Inc., which sponsors skateboard Tony Hawks, reported revenues of $975m for its fiscal year ended October 31, 2003. The company was founded at Bells Beach, Victoria, Australia in 1970 but since 2000 has been based at Huntington Beach, California.

Robert B. McKnight, Jr., Quiksilver, Inc's CEO, said:

“DC shoes is a tremendous fit with our organization from a cultural, strategic and operational standpoint. They are a young, aggressive and energetic company which reminds me a lot of Quiksilver. We both share respect for the authenticity that makes our brands powerful, and we both benefit from product design that reflects technical excellence and great style. We expect to see tremendous synergies between our teams.”

Bernard Mariette, president of Quiksilver, Inc., said: “We expect DC to flourish with its separate design and marketing teams supported by the logistics of Quiksilver. While we have successfully developed a growing branded footwear business, DC’s management team will help fine tune our footwear operations and product. At the same time, we believe that DC has an excellent, but so far, relatively untapped opportunity, to deliver an even stronger sportswear line to the youth market.”

Block said: "We are very excited to be partnering with Quiksilver, the number-one action sports brand in the industry. Their global platform will provide us with the resources to make DC even stronger, while allowing us to maintain the integrity and spirit of DC's roots."

The total purchase price for the acquisition will consist of an initial payment of $56m in cash and 1.6 million restricted shares of Quiksilver common stock, worth about $31m, and the assumption of approximately $10 million in funded indebtedness. Subject to hitting performance targets, Block and Way may receive up to an additional $57m paid over four years through 2007.

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