MOSS ADAMS: Networking reception at MAGIC.
KNOWSHOW: Boat party on July 29 to celebrate the trade show's 10th anniversary.
Details on Industry Insight.
Volcom is buying Electric visual for $25.5 million in cash. In addition, Electric owners have an earn out of $21 million if they hit their financial targets over the next three years.
Electric will operate as a standalone brand run by founders Kip Arnette and Bruce Beach.
This is super interesting - the first Volcom acquisition and perhaps a new path for the company as it looks to grow and use its $80 million in cash on its books.
Electric currently sells 29 sunglass styles in 213 SKUs under three core price-point categories as well as 6 snow goggle styles in 63 SKUs.
Here's the release:
COSTA MESA, Calif.--(BUSINESS WIRE)--Volcom, Inc. (NASDAQ: VLCM - News) today announced it has reached an agreement on an all-cash offer to acquire privately held Electric Visual Evolution, one of the most recognized and respected eyewear brands in action sports.
Under the terms of the agreement, Volcom shall pay to Electric shareholders $25.25 million in cash upon the closing of the transaction, subject to certain indemnities and post-closing adjustments. Electric shareholders also will be eligible to earn up to an additional $21.0 million over the next three years upon achieving certain financial milestones.
Electric will operate as a wholly owned subsidiary of Volcom and will be maintained as a stand-alone brand.
Known for its volt logo, Electric is a core action sports lifestyle brand. The company's growing product line includes sunglasses, goggles, t-shirts, bags, hats, belts and other accessories. Electric, which achieved net sales of approximately $23.5 million in 2007, has an established global platform which will serve as the foundation for further growth. The company was founded in 2000 by industry veterans Kip Arnette and Bruce Beach and is headquartered in Orange County, California.
"We are very excited about this partnership," said Richard Woolcott, Volcom's president and chief executive officer. "Electric is a powerful brand with a lot of potential, and together, we look forward to leveraging each other's strengths and expertise.
"Culturally, Electric is a perfect fit for our company," Woolcott continued. "We've known the Electric team for a long time, and we recognize they share the same passion and love for action sports as we do here at Volcom. Our companies are very much on the same wavelength, sharing similarities in product distribution, marketing efforts and a strong commitment to quality and innovation. Everyone here is stoked to welcome Electric into the Volcom family."
"We believe this partnership will enable us to take the Electric brand to the next level," said Bruce Beach, co-president and chief executive officer of Electric. "We are very excited about working closely with the Volcom team to grow our existing eyewear business and further expand into new product categories. Additionally, this partnership will enable us to grow our retail relationships and to continue to strengthen our operational capabilities."
"Volcom has an amazing team and an incredible heritage in the action sports industry," said Kip Arnette, co-president and chief design officer of Electric Visual. "We could not have hoped to partner with anyone more capable on an operational level and more in-line with us culturally, than Volcom."
The acquisition, which is expected to be earnings per share neutral in 2008, expands Volcom's leadership in action sports and provides important product diversification opportunities. According to a 2006 SIMA Retail Distribution Study, sunglasses are viewed as the most important accessory category by retailers. Electric currently sells 29 sunglass styles in 213 SKUs under three core price-point categories as well as 6 snow goggle styles in 63 SKUs. The company has maintained careful, controlled product distribution in core action sports, lifestyle, sporting goods and sunglass specialty stores.
Volcom senior management will discuss the acquisition of Electric during its presentation today, January 16, 2008, at the 10th Annual ICR XChange Conference at 3:55 p.m. PST at the St. Regis Monarch Beach Resort in Dana Point, California. The presentation is open to all interested parties through a live audio Webcast accessible on the investor relations section of Volcom's Web site, www.volcom.com/investorrelations/, where it will be archived and available for 30 days following the presentation.