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Columbia Seals Deal for Prana

Acquisition is for approximately 13 times EBITDA.

Columbia Sportswear Co. has completed its acquisition of Prana Living LLC from Steelpoint Capital Partners and others for $190 million in cash.

Portland, Ore.-based Columbia said on April 29 it had reached an agreement to acquire the company based in Carlsbad, Calif. Founded in 1992, Prana emphasizes sustainable production methods in marketing a collection of sportswear geared to outdoor pursuits, including rock climbing, and yoga and exercise. Its sales have enjoyed a compound annual growth rate of more than 30 percent since 2010 and are expected to pass the $100 million mark this year. Its operating margin is said to be in the low double digits.

The purchase price is about 13 times Prana’s anticipated earnings before interest, taxes, depreciation and amortization for the current year.

Calling the acquisition a “great complement to our existing brands,” Columbia president and chief executive officer Tim Boyle commented, “Prana fits Columbia’s strategic priorities to expand into categories that appeal to complementary consumer segments, reduce our dependence on cold-weather products and leverage Columbia’s global operational platforms to expand across key geographic markets.”

In addition to the namesake brand most closely associated with outerwear, Columbia’s portfolio includes Mountain Hardwear, Sorel and Montrail.

Prana products are sold through about 1,400 specialty store and pure-play accounts as well as its five U.S. stores, Web site and catalogues.

Distribution outside North America currently accounts for about 5 percent of sales, a figure Columbia hopes to boost through its distribution platforms in more than 90 countries outside North America.

As expected, Columbia funded the acquisition through available cash. It expects to recognize about $55 million in Prana sales in the remainder of its fiscal year.

Prana becomes a wholly owned subsidiary of Columbia and will continue to be headquartered in Carlsbad. Scott Kerslake remains ceo of the firm, reporting to Boyle.

The purchase price is subject to customary post-closing adjustments. Columbia anticipates about $4 million in one-time transaction fees and $9 million in amortization charges for certain assets and other integration costs.

J.P. Morgan Securities LLC advised Columbia on the transaction.