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Deckers to buy Sanuk for $120 million, plus potential earnouts

By Press Releases
May 19, 2011 1:04 PM

Press Release:


Source: Deckers Outdoor Corporation On Thursday May 19, 2011, 4:01 pm

GOLETA, Calif.--(BUSINESS WIRE)-- Deckers Outdoor Corporation (NASDAQGS:DECK - News) today announced that it has signed a definitive asset purchase agreement to acquire the Sanuk™ brand, an innovative action sport and adventure footwear brand known for its original sandals and shoes and irreverent marketing. The acquisition includes certain assets and liabilities of Sanuk U.S.A. LLC and of C. & C. Partners, LTD., the exclusive licensee for the Sanuk brand in the United States, Europe and Canada.


The total purchase price for the assets of both companies related to the Sanuk brand is an initial payment of approximately $120 million in cash subject to certain post-closing adjustments, and includes additional participation payments based upon performance over the next five years. The combined businesses generated in excess of $43 million of unaudited net sales in 2010.


Based on the expected closing in the third quarter of 2011, due to the seasonality of the business Deckers expects the acquisition of Sanuk to be modestly accretive to earnings for 2011, before transaction costs. Sanuk will remain headquartered in Orange County, California and senior management will continue to manage the brand.


In announcing the definitive agreement, Deckers President, Chief Executive Officer and Chairman of the Board of Directors Angel Martinez, said, "Sanuk is an ideal addition to the Deckers family of brands. It’s a profitable, well-run business with a corporate culture similar to ours, and provides substantial growth opportunities, particularly within the action sports market where it has a large and loyal customer base of active outdoor enthusiasts. Its authentic product collections complement our existing portfolio with minimal overlap, and it’s a brand that we believe has true global lifestyle potential.”


Sanuk (which means “fun” in Thai) was founded in 1997 by entrepreneur Jeff Kelley, whose first product was a sandal made of green indoor-outdoor carpet. With a history of innovation, product invention, foot-friendly comfort and clever branding, Sanuk is now one of the fastest growing footwear brands in the action sports, outdoor and sports markets. Sanuk is currently available in more than 1,700 retailers in 40 countries and at Sanuk.com, and enjoys diverse acceptance across multiple channels including in most surf/action sports retailers, outdoor retailers such as REI, EMS and Bass Pro, specialty retailers Fred Segal and Nordstrom and large chains including Journeys, Dillards and The Buckle.


Added founder Jeff Kelley: “We are excited to join forces with a company of Deckers’ caliber and culture. Deckers’ specialty and focus is and has always been footwear, and this expertise will help globalize and accelerate Sanuk’s growth. The management team at Deckers has a great track record of brand building, and we look forward to accessing the experience, operational expertise and global infrastructure they’ve built for their family of brands.”


In the 14 years since its founding, Kelley and his team have consistently brought creativity, fun and comfort to their line of sandals and shoes for men, women and children. Sanuk’s offerings now include the patented Sidewalk Surfer Shoe which effectively introduced the deconstructed footwear movement, the Fraid Not sandal collection, and the Yoga Mat sandal made from yoga mat material, which was cited as the 2010 Product of the Year by the Surf Industry Manufacturers Association (SIMA). Sanuk continues to build on its authentic position in the surf and outdoor markets through its relationships with prominent professional athletes, known as much for their unique personal styles and charisma as for their specialized talents. Athletes currently working with Sanuk include surfer Dave Rastovich, competitive bouldering champ Sierra Blair-Coyle and rock climbers Chris Sharma, Daniel Woods and Ethan Pringle.


The acquisition, which will be funded by Deckers’ existing cash balances and is expected to be completed by the beginning of the third quarter, is subject to customary closing conditions, including regulatory approval. Peter J. Solomon Company, L.P. acted as financial advisor and Stradling Yocca Carlson and Rauth acted as legal advisor to Deckers. Moss Adams Capital, LLC acted as financial advisor and Daniel P. Murphy, L.P. acted as legal advisor to Sanuk USA and C. &C. Partners, LTD.


Deckers Outdoor Corporation strives to be a premier lifestyle marketer that builds niche brands into global market leaders by designing and marketing innovative, functional and fashion-oriented footwear developed for both high performance outdoor activities and everyday casual lifestyle use. Teva®, Simple® Shoes, UGG® Australia, TSUBO®, and Ahnu® are registered trademarks of Deckers Outdoor Corporation. For more information, please visit www.Deckers.com.



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