Black Diamond has signed a definitive asset purchase agreement to sell its Gregory Mountain Products, LLC brand for $85 million to Samsonite LLC. The transaction is subject to customary closing conditions and expected to close in late July 2014.
For the 12-month periods ended December 31, 2012 and 2013, Gregory recorded total sales of $30.6 million and $34.9 million, respectively.
“The Gregory sale is an important part of a strategic pivot that we initiated last fall to re-focus investment away from strategic acquisitions and into our core and fastest growing brands,” said Peter Metcalf, president and CEO of Black Diamond. “We plan to use a portion of the proceeds to repay our existing indebtedness with Zions Bank and to reinvest the remaining net proceeds from this transaction into the long-term development of Black Diamond and POC.”
BD expects to realize net proceeds of approximately $69.2 million after fees, expenses and taxes. It had approximately $26.7 million of outstanding debt under its credit facility with Zions Bank as of March 31, 2014 which it expects to repay upon the closing of the transaction.
Metcalf continued: “The balance of 2014 is expected to be a transition period as we remove Gregory from the Black Diamond operating platform and complete the remaining initiatives related to our strategic pivot.”
Assuming the transaction closes as anticipated, the BD expects to provide revised second half and full year guidance when it reports its second quarter results in August 2014.
Rothschild and Kane Kessler, P.C. are serving as financial and legal advisors, respectively, to Black Diamond regarding its sale of Gregory.