LOS ANGELES — Quiksilver Inc. has agreed to acquire DC Shoes Inc., for $87.7 million in cash and stock, the Huntington Beach, Calif., surfwear company said Monday.

In the deal, Quiksilver will pay $56 million in cash and $31.7 million in its stock for the privately held men’s and women’s skate shoe brand. Quiksilver also will assume about $10 million in indebtedness and hand out $57 million over four years through 2007 to DC Shoes founder and president Ken Block and other undisclosed partners if DC Shoes reaches certain performance targets.

Quiksilver’s move to acquire the Vista, Calif.-based shoe company will allow the firm to better compete with Nike and Adidas-Salomon AG, and will add about 6 cents a share to its earnings in fiscal 2005, according to Quiksilver executives.

DC Shoes notched $100 million in sales in 2003, primarily through core action sports specialty stores domestically and abroad. Quiksilver reported revenues of $975 million in its fiscal year ended Oct. 31, 2003. The deal is expected to close by the third quarter of fiscal 2004.

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