Clarus Corporation announced today that it has signed definitive merger agreements to acquire, in two separate transactions, Black Diamond Equipment, Ltd., and Gregory Mountain Products, Inc. The aggregate purchase consideration, prior to adjustments, for both acquisitions is approximately $135 million and the transactions have been unanimously approved by the Board of Directors of Clarus.
The combination of Clarus, Black Diamond and Gregory intends to serve as a public company platform within the outdoor equipment and lifestyle markets with opportunities for growth both organically and through targeted, strategic acquisitions.
Under the terms of the agreements, Clarus will pay $90 million in cash for Black Diamond, subject to adjustments, and $45 million for Gregory, subject to adjustments, approximately 50% of which will be paid with Clarus common stock valued at $6.00 per share and approximately 50% of which will be paid with a seven-year 5% subordinated note. In addition, certain shareholders of Black Diamond will use a portion of their cash consideration to purchase shares in Clarus at $6.00 per share.Gregory is being sold by entities owned and controlled by Warren Kanders, Clarus’s Executive Chairman, and Robert Schiller. Kanders will continue as Executive Chairman of the company. Schiller, Vice Chairman of Gregory and former President, Chief Operating Officer and a Director of Armor Holdings, Inc., will be appointed Executive Vice Chairman and a Director of the company. Peter Metcalf, the Co-Founder, President and Chief Executive Officer of Black Diamond, will be appointed President and Chief Executive Officer and a Director of the company. Robert Peay, Chief Financial Officer of Black Diamond, will continue to serve in that role with the company following the closing of the transactions.
Clarus anticipates closing the transactions, which are subject to customary closing conditions, in the second quarter of this calendar year. It expects to seek stockholder approval at its next annual stockholders meeting to adopt “Black Diamond Equipment” as the company’s new name. Following the closing, the company will be headquartered in Salt Lake City, Utah, the current home of Black Diamond.
The company believes that the integration and combination of Black Diamond and Gregory will produce incremental profit primarily from revenue synergies created through leveraging each business’s distribution network to grow various product categories and brands in geographies and end markets in which they currently are not sold, as well as from cost savings. Approximately 50% of the company’s sales are expected to be in North America, approximately 30% in Europe and approximately 20% in Asia, Africa, the Middle East and South America.
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