The Finnish sports goods group Amer Sports (Amer) announced the acquisition of the Nordic sportswear brand Peak Performance for 1.9 billion Danish kroner, with the seller being the Danish fashion group IC Group.
The transaction is to be completed via cash and bank loans, with an expected closing date of June 30. Home to well-known sports and outdoor brands such as Arc’Teryx, Salomon, and Wilson, Amer Sports aims to further strengthen its portfolio in casual and streetwear categories through this acquisition.
Founded in 1986 and headquartered in Stockholm, Peak Performance started with skiwear and has since evolved into a high-end sportswear brand covering a full range of products. The brand’s sportswear incorporates a strong street style and is particularly popular among consumers in its two main markets, Northern and Central Europe. It also conducts trade outside of Europe. Over the past 12 months, the brand achieved net sales of approximately 1.08 billion Danish kroner, with an EBIT of 123 million Danish kroner.
This acquisition will help accelerate Amer’s long-term strategic goal of achieving over €1.5 billion in apparel sales. Upon completion of the acquisition, 300 employees of Peak Performance will join the Amer Group. It is estimated that synergies from the acquisition could generate €10 million in benefits over the next few years. The company stated that the acquisition would also have a “slight” positive impact on this year’s financial performance.
Amer noted that President and CEO Heikki Takala said Peak Performance “is highly relevant to our current brand portfolio and closely tied to sportswear, with women’s wear and direct-to-consumer channels contributing the majority of the brand’s sales.” It is reported that over 40% of Peak Performance’s sales come from women’s wear, while direct channels contribute 45% of its revenue.
The IC Group board stated that over the past six months, the group conducted a strategic review of Peak Performance, ultimately deciding to sell. The group expressed satisfaction with the transaction price and believes it has found a suitable buyer. During the 6–12 month transition period after the deal closes, IC Group will continue to provide support and services to Peak Performance “on a cost-covering basis.”
IC Group Board Chairman Peter Thorsen said: “Many sharp and qualified buyers made attractive offers to acquire Peak Performance. We not only negotiated a satisfactory price for shareholders, but also had to ensure that we were handing the brand over to the right long-term owner. (Amer) has the means, capabilities, and resources to accelerate Peak Performance’s development strategy and enable the brand to reach its full potential.” In October 2017, IC Group hired investment bank Rothschild & Co to handle the sale. (See previous report on Luxe.CO: Danish fashion group IC Group seeks to sell its outdoor apparel brand Peak Performance)
IC Group is expected to receive net cash proceeds of 1.71–1.8 billion Danish kroner from this divestiture, a figure that may be affected by transaction costs, net working capital, and net liabilities. After closing, the proceeds will be distributed to group shareholders as a special dividend.
(1 Danish krone is currently equivalent to approximately 1.02 RMB)
| Source: Reuters, English websites Fashion Network, Fashion United
| Image source: Peak Performance official website
| Editor: Jiang Fan
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