Quiksilver to sell Rossignol unit for $147.6 million
Quiksilver (NYSE: ZQK) said it has received a binding offer of $147.6 million for the acquisition of 100 percent of the Rossignol Group from Chartreuse & Mont Blanc.
The offer is comprised of 75 percent cash and 25 percent from a seller's note. The deal, which is subject to a financing condition, is expected to close in the fall.
Headed by former Rossignol CEO Bruno Cercley, Chartreuse & Mont Blanc is majority owned by the Australian financial services company Macquarie Group (ASX: MQG) and supported by a non-voting minority interest by Jarden Corp. (NYSE: JAH). It is named after the two mountain ranges that are home to Rossignol's two key brands: Rossignol is nestled in the shadow of the Chartreuse mountain range and Dynastar in the shadow of Mont Blanc.
The proposed transaction includes the sale of the Rossignol, Dynastar, Look, and Lange brands of winter sports equipment and apparel. The company said the sale is consistent with its intention, announced in January 2008, to sell the Rossignol Group to reduce its exposure to the wintersports equipment manufacturing business.
Robert B. McKnight, Quiksilver's chairman, CEO and president, said in a statement, "This offer is a compelling transaction for Quiksilver and represents the culmination of a thorough sale process. Once completed, we can fully concentrate our efforts on our core apparel and footwear brands Quiksilver, Roxy and DC."
Quiksilver added that it plans to use the money to pay off debt.
Quiksilver first bought Rossignol in 2005 for $320 million in cash and stock. By the spring of last year, analysts had started to say that the addition of Rossignol was disappointing and that results from the ski gear unit was dragging down the overall stock price.
Citigroup analyst Kate McShane said in a research note the sale price is "roughly in-line" with her expectations, and noted that the deal comes six months after management put the business back up for sale, amid speculation that a sale would not occur.
However, she maintained a "Hold" rating and $10 price target on the stock, noting that she still sees challenges in apparel manufacturing through the rest of 2008, particularly from ongoing U.S. macroeconomic pressures and a potential slowdown in Europe.
Shares of Quiksilver rose $0.46, or 5.9 percent, to $8.22 in late morning trading on Aug. 27.
Quicksilver is scheduled to report its third-quarter financial results on Sept. 4.
Gander Mountain reports net loss for Q2
Tighter consumer spending on discretionary items was to blame as Gander Mountain (Nasdaq: GMTN) posted a second-quarter loss.
Gander Mountain reported a net loss of $4.9 million, or $0.20 per share, compared with a loss of $9.7 million, or $0.48 per share, a year earlier.
Revenue rose 16.8 percent to $252.9 million. Comparable-store sales decreased 11.7 percent in the second quarter.
The 2008 period includes $39.7 million in revenue due to the expansion of the company's direct marketing business through Overton's.
"As anticipated, second quarter results reflect continuing economic pressure on consumer purchases of discretionary items, and we expect these conditions to persist in the second half of fiscal 2008," President and CEO Mark Baker said in a statement.
Gross profit increased 30.9 percent to $67.5 million for the second quarter. As a percent of sales, gross profit increased 288 basis points to 26.7 percent, reflecting both improvement in business mix relating to higher-margin direct sales and increased retail product margins, the company said.
Selling, general and administrative expenses (SG&A) for the second quarter increased 21.1 percent to $66.9 million, and included $14.6 million in operational expenses from the direct marketing segment. As a percent of sales, SG&A for the retail segment improved 97 basis points over the comparable quarter last year.
LaCrosse Footwear receives $3.2 million order from Marines
LaCrosse Footwear (Nasdaq: BOOT) said its Danner subsidiary received a $3.2 million delivery order as part of a new contract awarded by the Department of Defense.
As part of the awarded contract, Danner will deliver the Danner Marine Temperate boot out of its Portland, Ore., facility within the next 60 days.
LaCrosse said the contract represents the company's largest one-time delivery order for 2008, surpassing the previous $3 million delivery order in June for the Mountain Cold Weather Boot.
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