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Just in: Rip Curl Readies to Sell!

Derek Rielly

by Derek Rielly

Three hundred mill? More?

Five years ago, almost to the day, Rip Curl’s three major shareholders figured they’d sell, but only if they could get close to half a billion dollars.

It was an ambitious, and not entirely unrealistic, amount arrived at by the founders Doug Warbrick and Brian Singer (who jointly own seventy two percent) and founder of Rip Curl in Europe, Francois Payot (eighteen percent).

It didn’t come off. A sale price of ten times earnings multiple ain’t an easy play to make. But worth a try. There’s a lot of dumb money out there.

Two years ago, Rip Curl was valued at $310 million after the board approved a share buyback from former senior ­executives no longer with the company.

News in today, suggests Doug, Brian and Francois are spit-polishing the biz for another swing at selling the house. Doug and Brian have appointed the Australian company Gresham and the US investment firm RW Baird and Co to manage the sale process.

According to the Australian Financial Review,

Private equity buyers are likely to be in the mix in the latest sale process for Rip Curl, particularly those who missed out on Billabong three years ago, including Altamont Capital Partners, which teamed up to bid with clothing giant VF Corporation, and Sycamore Partners, which backed former Billabong boss Paul Naude’s unsuccessful offer.

Ain’t it crazy? Who would’ve thought an American investment bank might one day own Billabong, Quiksilver and Rip  Curl and then merge the sons-a-bitches.
Twenty years ago, Billabong and Quiksilver were the kings of surf. Both of ’em went public, loaded up on debt, and crashed hard.
“It’s the end of an era. Look at Torquay. Two billion dollars worth of wealth and none of it put back. None of the owners’ kids work for the companies.” Maurice Cole 
Rip Curl survived because it stayed private, because it wasn’t beholden to the strictures of a public company, of reporting the bad news, of the constant grind to satisfy shareholders and keep the stock price moving upwards.
Of course, there’s the issue of Doug and Brian hitting their seventies. Almost sixty years of surfing apiece. Sometimes it ain’t a bad thing for an old man to step back and enjoy the fruit from his orchard.
In a beautiful world, it’d mean entrusting the company to a son or daughter groomed in the family biz. But that ain’t happening here.
As for the noted Victorian shaper Maurice Cole told me the other night.
“It’s the end of an era. Look at Torquay. Two billion dollars worth of wealth and none of it put back. None of the owners’ kids work for the companies.You look at Patagonia, (founder Yvon Chouinard’s son) Fletcher’s in there, Yvon’s wife is in there. It’s a family business. You can’t find anybody in surfing able to get their kids involved in the companies, and you got gotta ask why.”