Black Diamond Inc. Acquires Poc Sports for $43.5 Million
The parent company of Black Diamond and Gregory Mountain Products added protective gear brand Poc Sports to its team Thursday, acquiring the Swedish business for about $43.5 million. Black Diamond Inc. CEO Peter Metcalf talked first to OBJ about the deal
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The parent company of Black Diamond and Gregory Mountain Products added Poc Sports to its team Thursday, acquiring the Swedish action and snow sports protective gear brand for about $43.5 million.
In an exclusive first interview with OBJ, Black Diamond Inc. (Nasdaq:BDE) CEO Peter Metcalf told us that the niche, but fast-growing and innovation-leading Poc “is about as beautiful of an example” of the kind of brand his company is looking to acquire.
While those outside the industry might not be as familiar with the brand, Poc quickly has gained respect within the winter sports and mountain biking racing communities, particularly with youth. Founded in 2004, the brand is best known for its sleek and colorful helmets in the snowsports, mountain biking and action sports sectors, but also makes body armor, eyewear, gloves and apparel.
Black Diamond will fund its purchase of Poc with 90 percent cash (about $39.2 million) and 10 percent stock ( about $4.3 million). An additional $12.5 million bonus will go to Poc’s managament pending performace measures. The cash comes mostly from the public company’s secondary stock offering earlier this year, plus an open line of credit. When all is said and done, Black Diamond will have more than $20 million left in cash and credit for future possible acquisitions. Metcalf said the company is in conversations with several other brands.
Poc reported approximately $22.5 million in sales for its fiscal year, ended April 30, 2012—up 35 percent from a year ago, and up 80 percent in the United States, despite the warm winter, Metcalf said.
With the aid of Black Diamond’s global infrastructure and capital, Metcalf said he believes the Poc has the potential to reach “$100, $200, $250 million in sales at some point down the road.”
Poc’s global headquarters will stay in Stockholm, Sweden, where it employs 20 people. The company staffs another 15 people internationally. The Swedish headquarters will continue to handle design, sales, marketing and customer service, while Black Diamond will take over managing the factories, quality control and shipping to retailers. Poc CEO and founder Stefan Ytterborn will remain with the company and become global president of the brand.
“Given Poc’s mission to save lives and reduce the consequences of accidents for gravity sports athletes, partnering with a highly capable and energetic company like Black Diamond greatly enhances our ability to better serve our worldwide community of users,” Ytterborn said. “In Black Diamond we have truly found our match in terms of ‘hearts and brains.’”
Metcalf said he first reached out to Poc in February 2011 at the ISPO trade show. The two companies kept an open dialogue, and following Outdoor Retailer Summer Market 2011, Poc officials toured Black Diamond’s headquarters in Salt Lake City. After that, negotiations began.
Numerous synergies exist between the new sister brands within the Black Diamond Inc. portfolio, Metcalf said. He sees Poc helping Black Diamond and Gregory expanding more into the alpine and bike categories, while Poc has room to grow in the outdoor category. Already, Black Diamond is using some of Poc’s technology in its upcoming climbing helmets, something it was set to license from Poc had the acquisition not gone through, Metcalf said. And Black Diamond, which is on track to debut its first apparel line in fall 2013, will help Poc with its new mountain bike apparel line, Metcalf said.
As for buying a European company during shaky economic times for the old continent, Metcalf said he remains bullish in the long run about the opportunities overseas.
“I don’t think anyone foresaw Europe in the convulsive state as it is today,” he said. “That being said, it’s a market that is just as big as, or bigger than, the U.S., with a large mountain culture. And so for a company like Black Diamond, Europe is at least three times as big of a market as North America for our kind of product.”