Quiksilver Inc. plans to close the sale of its Rossignol division early this month, but will give the buyer a more than 50 percent discount because of the worldwide credit crunch.
The company said Friday that it would sell the French ski and snowboard manufacturer to Chartreuse & Mont Blanc for 40 million euros, or $50.9 million at current exchange, consisting of cash of 30 million euros, or $38.2 million, and a seller’s note of 10 million euros, or $12.7 million. When it announced the deal in August, the Huntington, Calif.-based board sports apparel maker expected to receive 100 million euros, $127.2 million at current exchange, including 75 million euros, or $95.4 million, in cash and a 25 million euro, or $31.8 million, seller’s note.
At the time of the agreement, when the euro was stronger against the dollar, the deal was valued at $146.7 million.
“In this time of unprecedented challenge in the global credit markets, price concessions were required to achieve a final sale of Rossignol,” said Quiksilver chairman and chief executive officer Robert McKnight Jr.
Quiksilver acquired the brand in 2005 for about $320 million in cash and stock. It cited a desire to reduce its exposure in the winter sports market when it put the division on the block in January.
The renegotiated sale will allow the firm to continue its distribution of Rossignol through the 2008-2009 winter season. It expects to collect an additional 5 million euros to 10 million euros, or $6.4 million to $12.7 million, on inseason receivables.
Chartreuse & Mont Blanc is majority owned by the Sydney-based Macquarie Group and is headed by former Rossignol ceo Bruno Cercley. Along with Rossignol, the company will pick up the Dynastar, Look and Lange lines of winter sports equipment and apparel.
Quiksilver also amended its 70 million euro European credit facility and planned to pay its lender 15 million euros, or $19.1 million, on Friday. The remaining 55 million euros, or $69.9 million, has been extended until March 14. The company said it retained Morgan Stanley to assist in a search for additional financing. The effort has been expanded to include private equity investment and other strategic alternatives.
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