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Billabong Mulls Takeover Bid, Sells Stake in Subsidiary Nixon

Trilantic Capital Pays $139M for 48.5% of Accessories Brand

Photo via Nixonnow.com

Private Equity investment firm, Trilantic Capital announced the purchase of a substantial stake in action sports accessories brand Nixon, Inc. The firm and its affiliates are said to have acquired 48.5% of the brand at $139M in convertible preferred stock. Nixon, acquired by Billabong Intl. Limited in 2006, is a leading brand in the action sports accessories segment currently present in more than 70 countries. The deal values the company at $484M. The experienced management team has brought Nixon to its current standing including the distribution of watches, soft goods, electronics and accessories. Trilantic will team up with Nixon founders, Andy Laats and Chad DiNenna. The group, in conjunction with Billabong, will work to advance the company’s global expansion.

Laats elaborates, “We look forward to our partnership with Trilantic and the opportunity to significantly increase the level of ongoing investment in the business to help us accelerate growth for all products in established and new markets.”

This all comes after news from parent Billabong, who was offered 766M Australian dollars (about $824M or $3 per share) from another private equity firm TPG last Friday.  Though profits have been dropping for Billabong, the firm rebuffed the takeover offer while announcing the Nixon deal. Though Billabong reopened consideration of the bid on Monday, The Australian is reporting that the deal is expected to be rejected again, saying TPG’s takeover offer “undervalues the company and its prospects”.  Billabong is said to be using the new funds to help pay down debt as it cuts $32M in annual costs and plans to close 100 stores, firing 400 employees, this year.

Nixon is a strong competitor in the accessories market with its appeal to active young adults and the fashionable middle-aged segment alike. It competes with some of the most forward-thinking brands in the segment yet remains differentiated with its hard edges and utilitarian aesthetic. Translated internationally, consumers can relate to the brand regardless of domestic trends and the price-point appeals to a mass audience.

by Natalia Ignaczak



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