Press release
New Wave Group AB (publ)
New Wave Group Acquires the Craft North America business from Karhu North America
Since 1999, the US company Karhu North America LLC (“Karhu”) has been the exclusive distributor in the United States and Canada of products under New Wave Group AB’s sports brand CRAFT. Today, New Wave Group has, through its wholly owned subsidiary New Wave USA Inc, acquired that part of Karhu’s business relating to distribution of CRAFT products, including inventory, certain intellectual property and contract rights. The transaction is structured as an asset acquisition. The initial purchase price amounts to US$ 3 million with an additional contingent price based on the results of the business over the next five years. The total contingent price cannot exceed US$ 4.75 million. Three Karhu employees will transfer in connection with the acquisition.
Because the acquired business has been operated within Karhu’s other operations, no separate audited sales and earnings statements are available for the CRAFT distribution business. Based on pro-forma information, the acquired business achieved sales of approximately US$ 6.9 million during the financial year 2012. New Wave Group anticipates that the transaction will result in the realization of additional annual EBITDA of approximately US$ 700,000.
The acquired business will be managed by a newly founded US company: Craft Sportswear North America LLC; an indirect wholly owned subsidiary of New Wave USA Inc. The present CEO of Karhu, Huub Valkenburg who was the founder of the CRAFT distribution business in North America, will continue as CEO of the new company, which will still be operated and headquartered in Beverly, Massachusetts. New Wave Group believes that the new acquisition and structure will form a strong basis for a further expansion of the CRAFT-brand in the US and Canada during coming years.
“We are very proud to have established Craft as a performance apparel brand in North America driving a profitable sustainable business and look forward to growing the brand even more in the years to come,” said Huub Valkenburg, new CEO of Craft Sportswear North America.
“As owners of the CRAFT-brand, we are very pleased with the acquisition and believe that this will give New Wave Group a good basis for expanding CRAFT in the US and Canada,” said Torsten Jansson, CEO and president of New Wave Group.
New Wave Group AB is listed on NASDAQ OMX Nordic Exchange in Stockholm. New Wave Group AB is a growth company that designs, acquires and develops brands and products in the corporate promotions, sports, gifts and home furnishings sectors. New Wave Group AB through its US subsidiary owns several businesses in North America including Cutter & Buck, Ahead, Inc. and Paris Glove. For more information please visit, www.nwg.se
About CRAFT: CRAFT is the pioneer of functional apparel for serious athletes. Since 1977 CRAFT has devoted itself to developing innovative clothing built to withstand extreme weather in all conditions. CRAFT works closely with its many sponsored athletes and national teams, and focuses on designing the highest performance gear. The brand’s foundation is its authentic understanding and love for the sporting culture, reflected in its strong involvement in cross- country skiing, biking, running and alpine skiing. Constantly working on optimizing construction technologies and innovative materials, CRAFT sportswear is the ideal training and competition gear for all activities year-round. For more information on Craft in North America, visit www.craftsports.us . For more information on CRAFT, visit www.craft.se .
Cautionary Note Regarding Forward-Looking Statements: Certain statements in this release are forward- looking statements, in that they express the New Wave Group’s current expectations about future events. These statements are subject to a number of risks and uncertainties. Actual future results may differ from those projected in any forward-looking statements.
Gothenburg, July 1, 2013
New Wave Group AB (publ)
Ernest R. Johnson CEO and President, New Wave USA Inc Tel: +001 206 830 6640
Lars Jönsson, CFO Tel: +46 (0)31-712 89 12
Magnus Rapp, Head of legal department Tel: +46 (0)31-712 89 03