Black Diamond Equipment to Go Public and Merge Gregory Mountain Products


Post by WildSnow.com blogger | May 10, 2010      

This is some wild financial stuff. Little old Black Diamond is going huge. Press release follows.

Black Diamond Equipment Ltd., a global leader in the climbing and freeride ski markets, today enters a transaction with Clarus Corporation to take the company public and simultaneously merge the operations of Gregory Mountain Products into a new operational platform.

“In my thirty years at the helm of Black Diamond, we have had an endless series of opportunities that we have capitalized on by moving confidently and boldly in the pursuit of our goals,” explains Peter Metcalf CEO of Black Diamond.

“In 2009/10, BD has managed double digit sales growth globally and is in excellent financial health. As we looked to the future, it was clear there remained only two primary challenges in our multi-decade pursuit of building a true built to last and autonomous company. They were the right, long-term capital structure as well a strong Board backstop for the CEO. So began a year long journey where we researched in a truly creative manner the myriad of possibilities that might achieve those two long term goals. The deal we are announcing today is as innovative and appropriate a structure as that created 21 years ago. It will insure that the golden years of Black Diamond are not behind us but clearly ahead.”

The structure of the agreement will have Clarus Corporation, a well financed, public company with no operations, concurrently acquire Black Diamond and Gregory Mountain Products and take both companies public naming the company Black Diamond Equipment. Warren Kanders will continue as Clarus Executive Chairman, Rob Schiller, Vice Chairman of Gregory will join the board as Executive Vice Chairman, Peter Metcalf, the Founder, President and CEO of Black Diamond, will become President and Chief Executive Officer and also serve as a Director of the Company. Robert Peay, Chief Financial Officer of Black Diamond, will become Chief Financial Officer of the Company.

Metcalf continues, “Speaking with Wayne Gregory and his team, we are excited by the complementary nature of our brands as well as the promise of the new business platform that will strengthen our company while keeping the brands discrete. We have each built very special, global companies and I would like to take this moment to sincerely thank all of the employees, friends, customers, vendors, and consumers that have helped us along the way. Over the last 30 years our mantra has been to build a beautiful and respected built to last company. With this deal, the last pieces of that global foundation are being put into place. We are excited for the bright future that lies ahead for the Black Diamond and Gregory brands.”

Celebrating its 20th Anniversary, Black Diamond Equipment Ltd. is an employee-owned manufacturer of equipment for rock climbing, alpinism and freeride skiing. With global operations based in Salt Lake City, Utah, Reinach, Switzerland and Zhuhai, China, Black Diamond’s passion for mountain sports is not only multi-dimensional, but also multi-national. By consistently building innovative, standard-setting products and actively preserving the mountain environment, Black Diamond has assumed a leadership role in the international outdoor community. For more information on Black Diamond visit www.BlackDiamondEquipment.com

Celebrating its 30th anniversary in 2007, Gregory Packs has been the longtime leader in expedition, backpacking and day packs. Gregory is world-renowned for setting durability, comfort and performance standard in backpacks.. Responsible for many industry firsts in backpacking fit and design, the Gregory research and design team, including company founder Wayne Gregory, continues to lead the way in backpack technology and performance.

More on the BD website

Comments

19 Responses to “Black Diamond Equipment to Go Public and Merge Gregory Mountain Products”

  1. Caleb Wray May 10th, 2010 1:37 pm

    “…excellent financial condition.” Then why go public? Hope this works out. It would be a shame to lose another one of our great gear manufacturers and innovators to Wall Street Corporate greed. And that comes from someone who worked on Wall Street for 10 years.

  2. SteveG May 10th, 2010 2:58 pm

    Have to agree with Caleb based on a look at history. When the focus goes from sales growth generated through quality and listening to customers to “enhancing shareholder value” the bean counters usually win and the core customers lose. Hope I’m wrong.

  3. Jonathan Shefftz May 10th, 2010 2:59 pm

    Another interesting aspect of this is taking Gregory back out from underneath the corporate ownership of BAE Systems, a major defense contractor.

  4. Caleb Wray May 10th, 2010 3:38 pm

    “bean counters”, funny you use that term Steve. We used that term often, in the same context. How true your statement is.

  5. SteveG May 10th, 2010 3:49 pm

    Long (too long?) career of selling to and watching companies with great products go through the cycle up close and personal. Watch for the “BD Climbing Value Pack” coming to a big box near you soon!

  6. Colin in CA May 10th, 2010 3:53 pm

    JS,

    Gregory was bought from BAE previous to this transaction. Just read an article on them in Sactown magazine. Seems like they’re going in the right direction, and Wayne is more involved than he was in recent years. It’ll be interesting to see what this does for them (although I’m more interested in BD).

  7. Jonathan Shefftz May 10th, 2010 3:57 pm

    I thought was going on simultaneously?
    This is the passage I read:
    “In 2007, they sold Armor to London-based BAE Systems for $4.5 billion. That sale included Gregory Mountain Products, which Kanders and Schiller are buying back from BAE for the merger with Black Diamond Equipment.”

  8. Dave May 10th, 2010 4:05 pm

    Gregory was purchased back from BAE in March 2008 and has been a standalone company since that time.

  9. Jonathan Shefftz May 10th, 2010 4:13 pm

    Ah, now I see:
    http://preview.tinyurl.com/25ronfg
    I was thrown off by all the outdated corporate histories and the apparently incorrect (or at least misleading) reference in the AP story.

  10. Njord May 10th, 2010 7:21 pm

    “As we looked to the future, it was clear there remained only two primary challenges in our multi-decade pursuit of building a true built to last and autonomous company. They were the right, long-term capital structure as well a strong Board backstop for the CEO.”

    My question is: If things are going so well and BD is kicking so much ass, why would BD need a “long-term capital structure” and a “strong Board backstop for the CEO”.

    Sounds like total sell-out to me…

    Njord

  11. Craig May 10th, 2010 8:46 pm

    This is all about the money, not the outdoor products or users. It will surely go the way of many one-time great brands like Kelty, etc. BD had a double digit growth because they forced their dealers to buy more through discount bundling and stuffed the pipelint and you can still see the goods on the shelves and at discounts. Perfect way to get the balance sheet to look nice for the Street. To bad. Another example of a large company growing on the backs of their small and medium retailers.

  12. SB May 10th, 2010 11:19 pm

    I wonder how the employees feel about this.

    Innovative and high quality products flow from interested, motivated employees. I haven’t seen this situation co-exist with an MBA’s idea of a good “long term capital structure.”

    Wasn’t BD “employee owned”?

  13. S1am May 11th, 2010 7:24 am

    I expect that this will work out about as well as when Dana Designs was purchased by a public company….you all prefer Dana Designs gear to Mystery Ranch gear right?

    Sure, it’s not a fair comparison since Dana were purchased by a company that already had a lot of brands to manage and that was already in the process of killing those (many once-great) brands. Pathological cynicism aside, it’s hard to believe that massive cash backing will make BD a better company. The product is already great. Why introduce shareholder coercion into the mix?

  14. Jed May 11th, 2010 12:46 pm

    A couple of posts about the transaction and the acquirer here:

    http://www.rockclimbing.com/cgi-bin/forum/gforum.cgi?post=2333080

    Does not look good.

  15. SteveG May 11th, 2010 2:10 pm

    Interesting (scary?) info in that article about the new BD head honcho Warren Kanders.

    “His previous big score was a military contractor called Armour Holdings…sold it off about the time that the DOJ and military began investigating a handful of armour providers for providing defective body armour to the military.”

    As a follow up:

    http://www.justice.gov/opa/pr/2008/October/08-civ-901.html

    …Armor Holdings Products LLC has agreed to pay the United States $30 million to resolve allegations that it violated the False Claims Act by knowingly manufacturing and selling defective Zylon bullet-proof vests, the Justice Department announced today…

  16. Petrus May 12th, 2010 3:26 am

    It just might be about money only, the old owners wanted to cash on a company that was/is in a good shape. would possibly too, if I was in the same situation.

    If the products go bad, new companies will rise again, see what has happened in the last 20 years: Arc’teryx, Mountain Hardwear, BD, Patagonia and several others have appeared and prospered. An innovative outdoor company makes a name in 10 years, makes money for 10 years, is sold out after that, new ones are born. Circle of business.

  17. RB May 13th, 2010 5:50 am

    Guys, it’s all part of the natural cycle (decay?) of things. The priority will shift to maximizing profit/shareholder value and the quality of the product in the end users eyes will become secondary.

    Opportunities will arise for new, small niche companies to fill the void. It’s up to you to make intelligent decisions with how you spend your money. It isn’t necessarily easy, but that’s how capitalism works. I kinda like it.

    Far better than the commie model where you take what the government gives you. Oh, wait, we’re marching down that road as well. It just might take a while for them to take over the outdoor gear market.

  18. Lou May 13th, 2010 5:57 am

    First, health care reform, next, sport climbing reform? (grin)

  19. Slammin May 14th, 2010 10:15 pm

    Maybe between the two companies they could build an avalung pack that is comfortable and actually made for backcountry skiing. I recently purchased the covert w/avalung and could not even fit my probe or shovel blade in the outside pocket which i believe is supposed to be designed for these tools….gripe.

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