Billabong Sells Large Share of Nixon Label
Surf’s up for Nixon watches.
Billabong International, based in Australia, announced it was selling a large portion of its Nixon brand to Trilantic Capital Partners for $285 million. Billabong will turn around and use the money to pay off debt, according to a Feb. 16 press release.
New York–based Trilantic will retain a 48.5 percent share of Nixon, which started out as a watch label for surfers and expanded into other accessories. Billabong will keep another 48.5 percent, and the remaining 3 percent will be purchased by management. The transaction values Nixon at approximately $464 million, 9.2 times the last 12 months of earnings before interest, taxes, depreciation and amortization (EBITDA).
With new capital, Billabong and its new partner will try to expand the brand globally and into other areas. “Nixon has achieved strong growth since Billabong’s acquisition of the brand in 2006. Nixon is now well placed to grow deeper into accounts such as existing Nixon retailers, specialty watch and fashion retailers, and select consumer electronics stores. The partnership with Trilantic gives Nixon the financial backing and impetus to achieve this growth,” said Derek O’Neill, chief executive of Billabong.
Billabong has had a tough year. Its profits for the first half of its fiscal year ending
Dec. 31, 2011, were down 72 percent to $16.1 million.
Nixon, based in Encinitas, Calif., was founded in 1997 by Andy Laats and Chad DiNenna after DiNenna was unsuccessful in finding a watch that fit his surfing lifestyle.
Laats was a mechanical engineer working for Burton, a snowboarding company in Vermont, and getting his MBA from Stanford University. DiNenna was a communications graduate from California State University, Long Beach. The two raised $1 million from venture capitalists to start Nixon. They debuted with seven models in 200 stores. They sold the label to Billabong for $55 million up front and a deferred payment of $76 million in fiscal 2012.
Laats and DiNenna will stay on as president and executive vice president of marketing, respectively. They will hold a significant amount of equity investment with the rest of Nixon’s senior management team.
Trilantic Capital was formed in 2009 by former principals of Lehman Brothers Merchant Banking, the former private-equity arm of Lehman Brothers, which collapsed in September 2008.—Deborah Belgum
