For, uh, $23.7 million…
Update: Less than a day ago, I wrote the story below in which I suggested Surf Hardware International (which includes Gorilla Grip, FCS etc) was just about to be sold for bullish $160 million.
Boy, was I off. The online clothing retailer SurfStitch, which also owns Stab and Magic Seaweed, just bought it. For the very bearish $23.7 million.
Read about it the acquisition here and what SurfStitch plans to do with the company.
You can read my other failed prophecy below…
You can react two ways to the merciless and aggressive greed of the biz world. Either crave, pointlessly, for less rapacity or you can marvel at the ability of those who can grab a co with potential, polish it a little, and offload it at fantastic profit.
“Vulture Investors” Oaktree Capital Management, which owns 19 per cent of Billabong and now controls Quiksilver Inc after its recent bankruptcy, is one company very good at this kind of biz.
Pals in the share game tell me the new, leaner, debt-free Billabong has never been a better buy, thanks to Oaktree.
Last month, it was reported that the plan was to combine to the two surf co’s.
Surf Hardware, aka FCS, meanwhile, is in the process of being sold, at least according to a recent phone call I received. Now, if y’aint au fait with the biz and its importance to our surf game, maybe y’should.
In the early 1980s, Bill McCausland and two partners founded the company Fin Control Systems. It grew. We all started buying boards with plugs in ‘em. Along came a raft of removable-fin imitators.
It all went pear-shaped when the new company’s CEO and McCausland didn’t, uh, get along. The company sacked McCausland but, wait, he had thirty per cent of the company. A receipt for harmony, yes? But, no.
Shit went downhill. I glaze over at this kinda stuff. But read it all here.
Ten years of court battles followed. Read about the case here.
Anyway, looks like McCausland came out of it with a few mill. Enough to keep the wolves at bay, but maybe tough to swallow when y’hear the biz is rumoured to be sold for $160 million, and your share would’ve peeled you off $50 million.
I called FCS for a comment, got a nice enough accounts guy who refused to comment either way but obfuscated enough to make me think, yeah, the sale is under way.
And we’ll find out if it’s true soon enough.
I’m a Futures guy so I don’t care.
interesting to see that it wasn’t a French Co , and I think Futures were given the 1st dig , but did not like the debt , which means is FCS a money making concern , especially when most surfers are tired of losing their FCS II fins and now buy The old fins with the tabs and screw em in. but there are so many manufacturers now doing these fins , so maybe the FCS II plugs and fins are really just a sales and marketing hype , but technically are pretty average!
The FCS11 fin system is patented, meaning board manufacturers not wishing to get slapped with intellectual property law suits have to use genuine FCS product. A tried and true business principle, but in this case, a very shitty execution.
Any news on what happened to BBG shares on ASX today? Was trading at $0.52 yesterday and it’s not listed anymore! It now trades as BBGDA at $2.54! Consolidation? Did someone here saw their fortune quintuple overnight?
So the $23.7m price is for the Enterprise Value, not just the equity. Enterprise value = market capitalisation (ie the equity) plus debt minus cash. In the Surf Stitch announcement they reference raising $50m in part to pay off the debts of SHI, but without knowing what those debts were it’s impossible to know what the equity was worth.
Safe to say however that the shareholders are getting less than $23.7m for their shares (in total), and maybe a lot less. Certainly orders of magnitude less than was referenced yesterday.
Maybe stick to the North Shore rumour mill instead and let the AFR deal with the suit stories hey Beach Grit. Otherwise, please continue the fine work.
…yeah, I jumped the gun a little on that… I’ll keep swinging, but will pull head in somewhat…
OK, so Lex, and his business partner in the last few months have, bought Billabong out of surfstich (which included Swell, watch out for surfstitch to be rebranded, and magic seaweed store) Stab, and Now FCS. How much are these 2 making from the masses wanting to look like MF?
Samsonite, I was way off! When is Surfstitch putting a bid in for BeachGrit?