Black Diamond Inc. announced this morning that it will sell its Gregory Mountain Products brand to Samsonite for $85 million. The deal is expected to be finalized ahead of the Outdoor Retailer Summer Market trade show, set to take place the first week of August in BD's home state of Utah.
Black Diamond President Peter Metcalf said in a release that the move would allow the company to focus on core products and pay down debt.
"We plan to use a portion of the proceeds to repay our existing indebtedness with Zions Bank and to reinvest the remaining net proceeds from this transaction into the long-term development of Black Diamond and Poc," Metcalf said. Black Diamond acquired the latter brand, a Swedish helmet and protective equipment maker, for $43.5 million in 2012.
Separately, Metcalf told SNEWS: "The Gregory Team are all being offered employment and all are indicating they have no plans of leaving." He offered assurances to specialty outdoor retailers, whom, he said, "should be excited by this transaction."
Regarding OR, Metcalf added, "The booth space is booked, the booth ready for deployment, appointments made, Backbone doing PR, the same faces working out of the same offices."
Gregory reported total sales of $30.6 million in 2012 and $34.9 million in 2013. Black Diamond said in its announcement that it expects to net $69.2 million from the deal with Samsonite, after fees, expenses and taxes. The debt the company expects to repay to Zions Bank upon closing the sale was $26.7 million as of March 31, 2014.
"The balance of 2014 is expected to be a transition period as we remove Gregory from the Black Diamond operating platform and complete the remaining initiatives related to our strategic pivot," Metcalf said.
Samsonite currently targets the outdoor market with its High Sierra brand, but is aiming for a higher-end consumer with Gregory.
"There's a growing trend towards living healthier, more active lives and the number of consumers participating in outdoor activities has been increasing steadily as a result. The transaction further positions us to address this trend by offering two well-known and respected brands – Gregory in the premium segment and High Sierra in the mid-market – offering us significant growth opportunities in the outdoor market," Tom Korbas, Samsonite's Americas president, said in a release.