Billabong has finally found a suitor for the company that will get it out of it’s troubles (for now). The company announced last week that it had reached a deal with a private equity firm called Altamont Capital Partners to a debt rescue deal. As part of the deal, Billabong has also handed over it’s brand Dakine sports to Altamont Capital.
The rescue deal from Altamont Capital Partners will be and equity swap deal which will mean Altamont will get 15% off Billabong in exchange for a $325 loan. The deal with Altamont comes after the company rejected two offers from Oaktree Capital Management and Centerbridge Partners. The deal also means that, with options, Altamont can own up to 40% of the company. An approval by shareholders is required before the deal can proceed.
Billabong has been on a huge slide over the past few years with sales dropping dramatically with the downturn in the world economy. It has struggled to stay afloat and has had to close stores and sell brands to survive. It has a couple of bright spots, such as it’s SurfStitch brand in Australia. The online only store has traded exceptionally with intelligent marketing utilizing coupons. Selling off these assets may be the only way out of trouble for the company should this deal fall through.
