It’s been a rollercoaster ride for Black Diamond Inc. (NYSE:BDE) and its public stockholders.
Three years ago, the business purchased Poc Sports for nearly $45 million with visions of an outdoor multi-brand company (including Black Diamond Equipment, a BD apparel launch, Pieps, and Gregory) that would grow to $500 million in sales by 2015.
The plan didn’t work, and as cash reserves dwindled, Black Diamond dealt with staff restructuring, sold off Gregory in 2014, had its new President and slated CEO leave the company in 2015, and put the entire business up for sale.
Even the sales process was a bit bumpy as a potential full sale of the company turned into talk of a partial sale.
Thursday, as predicted by some investors cited by OBJ, Black Diamond announced the sale of only one of its pieces — Poc Sports — to investment group Investcorp for $65 million. Company officials say POC sold for 1.9-times its annual sales, which came in at $34.8 million 2014.
The sale brings Black Diamond back to its core of climbing and wintersports goods, although officials said diversification within the company could still occur.
“Black Diamond plans to maximize shareholder value by focusing its attention on the profitability of both the Black Diamond Equipment and Pieps brands while redeploying the proceeds of the sale to potentially unrelated and diversifying investments. Black Diamond expects to realize net proceeds of approximately $60 million after purchase price adjustments, fees, expenses, and taxes,” officials said. “Post-transaction, the company expects to have approximately $100 million in cash, $22.6 million in debt, and around $167 million in net operating loss carry forwards.”
To undiversify and then rediversify could be a branding marketer’s worst nightmare. Investors, who had previously hoped for an outright sale or bigger dollars from a partial one, were also unhappy, sending Black Diamond’s stock down more than 12 percent to $5.68 per share at midday Thursday.
Investcorp will add Poc Sports to its $10.6 billion portfolio, which also includes Dainese, a motorsports safety brand, among other real estate and hedge fund investments.