HUNTINGTON BEACH, Calif.–May 11, 2000– Quiksilver, Inc. (NYSE: ZQK) today announced that the Company has entered into a letter of intent to acquire Quiksilver International Pty Ltd, the Australian owner of the worldwide trademark rights to the Quiksilver brand name.
Under the terms of the proposed transaction, Quiksilver, Inc. will acquire the shares of Quiksilver International Pty Ltd within approximately 60 days. The purchase price will be in three approximately equal installments, the first of which will total about $22,000,000 to be paid upon closing. The second and third installments will be paid in 2002 and 2005, with final pricing to be determined by an earn-out agreement. The transaction is contingent upon completion of due diligence, the obtaining of satisfactory financing and the execution of a definitive agreement.
Robert B. McKnight, Jr., Chairman and Chief Executive Officer of Quiksilver, Inc., commented, “From our inception, the strategic goal was to own the worldwide rights to the Quiksilver trademark. After years of ongoing negotiation, we are pleased to announce this deal with Quiksilver International, which will give our company a true global reach. This milestone transaction represents a major step in our plan to become the premiere lifestyle brand for today’s youth around the world.”
“From a financial standpoint, we expect this acquisition to be only mildly accretive this year, but longer-term, we believe this will become very meaningful to our bottom line,” Mr. McKnight continued. “Strategically, we will now have the opportunity to go into existing and new territories, further leverage our product, brand and marketing, and maximize the opportunities that exist in those markets.”
Quiksilver, Inc. has owned the Quiksilver trademark in the United States, Mexico and Puerto Rico since 1986. Quiksilver International Pty Ltd has granted a total of 17 license/distribution agreements including those for Quiksilver Inc.’s current export businesses in Canada, Central and South America and for its European subsidiary, Na Pali. Other significant agreements are with licensees in Australia, Japan, South Africa, Brazil, Chile, Argentina, Indonesia, Korea and Turkey (Eastern Europe), several of which have been Quiksilver licensees for over 20 years.
Alan Green, Quiksilver founder and majority shareholder of Quiksilver International Pty Ltd, stated, “It’s the right time to bring Quiksilver under one common management. When we started Quiksilver nearly 30 years ago, we hardly dreamed it would develop into the lifestyle brand that it has become today. And now, we have combined to create a global powerhouse and take the next step in the evolution of Quiksilver.”
Mr. McKnight concluded, “The power of the Quiksilver brand has truly become global, and we are excited about the prospects for bringing its stewardship under one operating entity. We believe the growth opportunity this deal presents us is unmatched in the history of the Company and we look forward to capitalizing on the many new opportunities that lie ahead.”
Quiksilver designs, produces and distributes clothing, accessories and related products for active-minded people and develops brands that represent a casual lifestyle – driven from a boardriding heritage. Quiksilver’s authenticity is evident in its innovative products, events and retail environments across the globe.