Kathmandu's acquisition of Rip Curl has been finalised. Photo / Nick Reed
Kathmandu's acquisition of Rip Curl has been finalised. Photo / Nick Reed
Kathmandu Holdings has completed its A$350m acquisition of Australian surfing brand Rip Curl and appointed Reuben Casey as chief executive for its Kathmandu division with Xavier Simonet continuing as group chief executive.
Kathmandu said Chris Kinraid will continue as group chief financial officer role, while Michael Daly will continue as chief executive of the Rip Curl business.
Casey, who is currently chief operating officer, Kinraid and Daly will all report to Simonet.
Casey joined Christchurch-based Kathmandu in 2010 as a financial controller. He works out of the retailer's Christchurch office, and Simonet in the Melbourne headquarters.
"Reuben has been a key contributor to the success of Kathmandu over the last few years. I congratulate him on his promotion and I wish him all the very best success as chief executive officer of Kathmandu," Simonet said.
Dual ASX/NZX-listed Kathmandu launched a takeover bid to acquire Rip Curl for A$350 million ($368m) at the start of the month. The transaction was financed through a capital raise of $144.5m, and placement of approximately $32m of Kathmandu shares to the founders and CEO of Rip Curl. Approximately $230m of the acquisition price was funded through secured debt facilities.
Major Kathmandu shareholder Rod Duke, managing director of Briscoe Group, requested allocation of 5.33 million shares during the raise, valued at $13.6m at the issue price of $3.06 a piece.
The share allocation represented just 50 per cent of Briscoe's total entitlement.
The retail company opted not take up all of its rights as Duke said a total $88m investment in the company - equivalent to 16 per cent shareholding - was "about where it wanted to be".
"The Board considers the level of investment to be at an appropriate level and as the single largest shareholder we continue to maintain a close interest in the company," Duke told the Herald earlier in the month.
Kathmandu chief operating officer Reuben Casey has been appointed to chief executive. Photo / Supplied
He said Briscoe was "supportive of Kathmandu's initiatives to diversify and grow their business via the acquisition."
Kathmandu's acquisition of Rip Curl creates a billion-dollar opportunity for the company, combined with its Oboz Footwear brand.
The company said the acquisition would lift its earnings by 10 per cent in the 2020 financial year, and is expected to take the company into new growth territory.
Meanwhile, American footwear retailer Nike sold its surf and skate brand subsidiary, Hurley, for an undisclosed sum after 17 years.
Kathmandu increased its share price by more than 9 per cent in the year to July 31 and posted an annual net profit of $57.6m. It sales during the last financial year increased by 9.7 per cent to $545m. It has a market capitalisation of $925.4 million and nearly 295 million shares on issue after the capital raising.
The company's stock was trading at $3.13 per share at 10:30 this morning.
