Rip Curl has hired Bank of America Merrill Lynch to study unsolicited takeover offers from several international companies. Australian newspapers estimated that such a deal could fetch up to 480 million Australian dollars (€384.7m-$504.7m), equivalent to 10 times the Australian board sports brand's projected Ebitda for the fiscal year to June 2012.
The news comes hot on the heels of a second bid for Billabong International, as described further, indicating that investors are eager to buy into companies that may have been exposed to the weakness of Australian consumption. However, Rip Curl pointed out that its unaudited sales and profits for the fiscal year until June had increased. Another major difference between the two companies is that Billabong has built up a group with several brands, whereas Rip Curl focuses on the eponymous brand.
Rip Curl said that it had spotted opportunities for investments to complement its organic growth, and was therefore studying whether any of the potential investors who knocked on the door ought to be introduced to the group. Rip Curl could probably do with investment support to catch up with other board sports brands in the U.S. market, where its market share remains relatively small.
Rip Curl is still owned at 72 percent by Doug Warbrick and Brian Singer, two surf-mates who established the brand in 1969 near Bells Beach, southwest of Melbourne. Now aged 68 and 70 years, they are said to be considering their options for the business.
The Australian reports speculated that one of the potential investors was Bain Capital, which was also identified as the second bidder for Billabong. Others pointed to large sporting goods companies, such as Adidas and Nike, as well as groups such as VF Corporation, the owner of brands from The North Face to Vans and Reef.