BURLEIGH-based SurfStitch continues to ramp up its bold acquisition strategy, announcing the purchase of online surf shop Surf Hardware International (SHI) for $23.7 million.
This comes on the back of the acquisition just two weeks ago of Garage Entertainment and its associated company TMG, which SurfStitch is acquiring for $15 million.
SurfStitch has entered into definitive agreements to acquire 100 per cent of the shares of SHI, and will pay cash for the global water board sports distributor.
SHI is home to popular global brands including FCS, Gorilla, Hydro and Softech, with strong market share in Asia-Pacific, the US, Europe and Japan.
SurfStitich, which is emerging as a serious online retail player in the surfwear and action sports niche, says the acquisition strategically aligns with its core objective to create an environment capable of capturing and influencing those involved in the surf and action sports lifestyle culture.
"SHI's brands and products are globally renowned in the surfing and water board sports industries," says SurfStitch CEO Justin Cameron.
"We look forward to collaborating with SHI on the design and sale of new and innovative products, as well as creating premium and engaging content that can be shared with surfers and fans around the world via SurfStitch Group's digital ecosystem."
The acquisition adds to the group's rapidly growing network which, in addition to Garage Entertainment, includes surf content network Magicseaweed and online publisher Stab magazine, which it purchased for close to $14 million and 4.8 million shares.
A fully-underwritten institutional placement of ordinary shares to raise about $50 million has also been launched, with proceeds being used to fund the repayment of SHI debt, transaction costs and working capital.
The group says this will also provide SurfStitch with the flexibility to pursue further strategic growth initiatives including complementary acquisition opportunities.
SurfStitch expects full-year underlying earnings, including its acquisition of SHI, to be between $18-22 - million more than double last financial year's result.
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