-- Bid approaches from private equity, trade buyers, source
says
-- Rip Curl appoints Bank of America Merrill Lynch to advise on
possible sale
(Adds additional history in fourth, sixth paragraphs)
By Gillian Tan
SYDNEY--Rip Curl said Monday it has received several approaches
from potential bidders, becoming the latest iconic Australian
surfwear brand to become a takeover target following two
private-equity offers for rival Billabong International Ltd
(BBG.AU).
Rip Curl has been approached by private equity and trade buyers
particularly interested in the closely held company's growth
potential in emerging markets, such as Asia and South America. An
outright sale could value the business at 500 million Australian
dollars (US$526 million), a person familiar with the matter
said.
Rip Curl was founded in 1969 by surf-mad friends Doug 'Claw'
Warbrick and Brian 'Sing Ding' Singer who like many locals close to
Bell's Beach, Victoria state, were producing surfboards out of
garages and tool sheds.
The Torquay-based partners pooled their funds to buy a pre-World
War II sewing machine which would piece together their first
wetsuits.
Since then, Rip Curl has expanded its footprint in Australia and
worldwide, with offices in countries such as the U.S., France,
South Africa, and Brazil.
Australia's first professional surfing competition, The Rip Curl
Pro, was first held in 1973 and still attracts the world's best as
one of ten legs of the Association of Surfing Professionals World
Championship Tour.
In a statement, Rip Curl said it has appointed Bank of America
Merrill Lynch to weigh the offers and it may introduce a new
investor.
"The board recognizes that if any such investment were to occur,
it would need to be consistent with our objectives of ensuring our
company values and brand values are respected, supporting our staff
and being in the interests of our shareholders," Rip Curl said.
Rip Curl's forecast earnings before interest, tax, depreciation
and amortization, or Ebitda, in the 2013 fiscal year is A$48
million, the person said.
Recent single-brand transactions including Billabong's stake
sale of Nixon to Trilantic Capital Partners, VF Corp.'s (VFC)
acquisition of Timberland and PPR SA's (PP.FR) acquisition of
Volcom Inc. have been completed at price-to-earnings multiples
between 9.2 times and 15.8 times.
A direct competitor of Rip Curl, Billabong has received
competing A$694.5 million proposals from global private equity
firms TPG Inc. and Bain Capital.
-Write to Gillian Tan at gillian.tan@wsj.com
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