Attached files
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| 8-K - Clarus Corp | v184083_8k.htm |
| EX-99.1 - Clarus Corp | v184083_ex99-1.htm |
| EX-99.3 - Clarus Corp | v184083_ex99-3.htm |
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Exhibit
99.2
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Clarus
to Acquire Black Diamond Equipment and
Gregory
Mountain Products
— Two
Pioneering Outdoor Lifestyle Brands to Access Public Markets, Establish
Platform
for Organic and Acquisition-Driven Growth —
—
Acquisitions Will Mark Successful Completion of
Clarus
Asset Redeployment Strategy —
Stamford, CT (May 10, 2010) —
Clarus Corporation (OTC: CLRS.PK) (“Clarus”) announced today that it has signed
definitive merger agreements to acquire, in two separate transactions, Black
Diamond Equipment, Ltd. (“Black Diamond”), a leading designer and manufacturer
of equipment for rock climbers, ice climbers, alpinists, and freeride skiers,
and Gregory Mountain Products, Inc. (“Gregory”), a premier designer and
manufacturer of technical backpacking and related mountaineering products and
accessories. 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 (together, the “Company”)
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 Mr. Warren B. Kanders, our
Executive Chairman, and Mr. Robert R. Schiller.
Mr.
Kanders will continue as Executive Chairman of the Company. Mr.
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. Mr. 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. Mr. Robert Peay, Chief Financial Officer of Black Diamond,
will continue to serve in that role with the Company following the closing of
the transactions.
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The
Company expects to further expand the Board of Directors to include Mr. Philip
Duff and Mr. Michael Henning. Mr. Duff was an original investor in
and currently serves as a Director of Black Diamond. From 1994 to
1997, Mr. Duff served as the Chief Financial Officer of Morgan
Stanley. Mr. Henning served in various capacities with Ernst &
Young from 1961 to 2000, including Deputy Chairman from 1999 to 2000 and Vice
Chairman of Tax Services from 1991 to 1993. The Company anticipates
that Mr. Henning will chair the Board’s Audit Committee.
It is
expected that the Company’s Board of Directors and officers will together
own approximately 35% of the approximately 21.6 million shares of Clarus common
stock outstanding at 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. Clarus 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.
About
The Company
Black
Diamond Equipment’s mission is to create products that match the idealism,
style, and action of the life-defining activities of climbing, skiing, and
alpinism. The company has more than 375 employees worldwide, with ISO
9001 manufacturing facilities in Salt Lake City and southeast China, a
distribution center in Germany and a sales and marketing office located outside
Basel, Switzerland. Black Diamond is well-known in the outdoor
industry as an innovation leader, having successfully extended the Black Diamond
brand to adjacent products categories through organic new product
development. Black Diamond holds over 60 patents in a broad range of
products including carabiners, protection devices, belay and rappel equipment,
helmets, ropes, ice-climbing gear, backcountry gear, gloves, tents, trekking
poles, skis, ski bindings and ski boots.
Gregory
Mountain Products, headquartered in Sacramento, California, serves the
backpacking, mountaineering, hiking, climbing, travel and lifestyle markets. In
North America and Europe, Gregory is a technical brand distributed through
leading outdoor specialty retail chains, including REI and EMS, and other
specialty outdoor retailers. In Japan and other Asian markets, in
addition to being a leading provider of technical backpacking products, the
brand also serves a premium lifestyle market, specializing in high-end daypacks,
briefcases and satchels. The company also supplies two Gregory-only
retail stores in Tokyo, Japan and Seoul, Korea.
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For the
year ended December 31, 2009, on an unaudited basis, Black Diamond and Gregory
together produced combined revenues of approximately $113 million. In
connection with the closing of the transactions, the Company expects that it
will more likely than not be able to realize a significant portion of its
approximately $88.9 million deferred tax asset and therefore will release the
related portion of its valuation allowance. As of March 31, 2010,
Clarus’ net operating loss carryforwards were approximately $231
million.
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’ 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.
“After a
thorough process of sourcing and reviewing potential redeployment opportunities,
I am excited to announce the signing of definitive agreements to acquire both
Black Diamond and Gregory” said Warren B. Kanders, Executive Chairman of
Clarus. “We believe these brands create a unique platform to build a
large, global, diversified company in the outdoor equipment and lifestyle
markets both organically and through targeted acquisitions.”
“For
nearly 30 years, Peter has grown Black Diamond and its predecessor from a
business with under $1 million in annual revenue to one with approximately $86
million in calendar year 2009, a compound annual revenue growth rate of over
16%, which is nothing short of outstanding,” Mr. Kanders
continued. “Importantly, both Black Diamond and Gregory grew their
businesses even during the recent economic downturn.”
Peter
Metcalf said, “We view today as a milestone towards fulfilling our dream of
building a unique company in our industry. Black Diamond and Gregory
have complementary product lines and distribution and the cultural fit between
the organizations is excellent. We are excited to be working with
Gregory and its Founder, Wayne Gregory. We now expect to have the
opportunity for growth on a much larger scale than has been previously available
to us as a private company and we believe that our financial and operational
discipline will make us an excellent public company. We look forward
to demonstrating a superior ability to create value for our customers, vendors,
partners, and stockholders.”
In order
to finance the cash portion of the transactions, Clarus will use the cash
resources from its balance sheet and proceeds from an expected senior credit
facility with Zions Bancorp, the incumbent lender of Black Diamond.
Commenting
on the structure of the transactions, Mr. Kanders said, “We believe that there
will be significant opportunities to deploy capital over time in our targeted
markets. We have structured the transactions to maintain a strong
balance sheet with ample liquidity to grow the business organically as well as
through selected acquisitions.”
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Clarus
received financial advisory services regarding the transactions from the
investment bank Rothschild Inc., and Rothschild rendered an opinion regarding
the Black Diamond acquisition. Ladenburg Thalmann & Co. Inc.
acted as financial advisor to a special committee of Clarus’ Board
of Directors in connection with the Gregory transaction and rendered a
fairness opinion to the special committee. The special committee was
represented by an independent legal counsel, Richards, Layton &
Finger.
Investor/Analyst
Conference Call
Clarus
will broadcast a listen-only conference call today at 8:30 a.m. EDT discussing
the transactions. To access the conference call, please dial
toll-free (877) 407-0789 or (201) 689-8562 (international). A
transcript of the conference call will be available in a Form 8-K filing on the
SEC’s web site at http://www.sec.gov or through
http://claruscorp.com.
To listen
to a telephonic replay of the conference call, dial toll-free (877) 660-6853 or
(201) 612-7415 (international) and enter account number 3055 and conference ID
number 350569. The replay will be available beginning at 11:30 a.m.
EDT on Monday, May 10, 2010 and will last through 11:59 PM EDT on Monday, May
24, 2010.
About
Clarus
Clarus,
since December 2002, has engaged in a strategy of seeking to enhance stockholder
value by pursuing opportunities to redeploy its cash, cash equivalents and
marketable securities through an acquisition of, or merger with, an operating
business or businesses that would serve as a platform company. Clarus
was formerly a provider of e-commerce business solutions until the sale of
substantially all its operating assets. For more information about
Clarus, visit www.claruscorp.com.
About
Black Diamond Equipment
Black
Diamond designs, manufactures, and sells lifestyle and technical products that
are targeted towards climbers, mountaineers and skiers, as well as the outdoor
enthusiast. Black Diamond is a worldwide leader in innovative design
with the highest quality standards. Over the years, Black Diamond has
grown from very humble beginnings into a global company by staying true to their
values, spirit, and love for the outdoors. Dedication, desire, and
diligence has been the hallmark of Black Diamond’s growth and today the company
has operations in North America, Europe, and Asia and customers on every
continent of the globe. Black Diamond products are sold principally
through specialty and online retailers. For more about Black
Diamond, visit www.blackdiamondequipment.com.
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About
Gregory Mountain Products
Gregory,
which celebrated its 30th anniversary in 2007, designs, manufactures, and sells
high-quality expedition, backpacking and day packs, serving the backpacking,
mountaineering, hiking, climbing, travel and lifestyle
markets. Gregory is world-renowned for setting durability, comfort
and performance standards in backpacks. In recent years, Gregory won
awards for its pack designs from such diverse media outlets as Outside Magazine,
Backpacker Magazine, National Geographic Adventure, Popular Science, Men’s
Journal, Consumers Digest and Alpinist Magazine. Responsible for many industry
firsts in backpacking fit and design, the Gregory research and design team,
including company Founder, Wayne Gregory, remains a leader in innovative
backpack technology and performance. For more information about Gregory,
visit www.gregorypacks.com.
CONTACT: Clarus
Corp.
Warren B.
Kanders
Executive
Chairman
203-428-2000
wbkanders@claruscorp.com
CONTACT: ICR,
Inc.
Investors:
James
Palczynski
Principal
and Director
203-682-8229
jp@icrinc.com
Media:
James
McCusker
Vice
President
203-682-8245
James.McCusker@icrinc.com
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Bo
Park
Managing
Director
917-596-4353
bo.park@icrinc.com
Forward
Looking Statements
This
press release includes “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Clarus may use words such as
“anticipates,” “believes,” “plans,” “expects,” “intends,” “future,” and similar
expressions to identify forward-looking statements. These
forward-looking statements involve a number of risks, uncertainties and
assumptions which are difficult to predict. Clarus cautions you that any
forward-looking statement is not a guarantee of future performance and that
actual results could differ materially from those contained in the
forward-looking statement. Examples of forward-looking statements include, but
are not limited to: (i) statements about the benefits of Clarus’ proposed
acquisitions of Black Diamond and Gregory, including future financial and
operating results that may be realized from the acquisitions; (ii) statements of
plans, objectives and expectations of Clarus or its management or Board of
Directors, including the expected timing of completion of the mergers; (iii)
statements of future economic performance; and (iv) statements of assumptions
underlying such statements and other statements that are not historical
facts. Important factors that could cause actual results to differ
materially from those indicated by such forward-looking statements include, but
are not limited to: (i) the risk that a condition to closing of the mergers may
not be satisfied and the transactions will not be consummated; (ii) the risk
that Clarus could be required to pay material termination fees if the mergers
are not consummated; (iii) the risk that the businesses will not be
integrated successfully; (iv) the risk that the expected financial or operating
results may not be fully realized as expected; (v) material differences in the
actual financial results of the mergers compared with expectations, including
the impact of the mergers on Clarus’ future earnings per share; (vi) disruption
from the mergers; (vii) economic conditions and the impact they may have on
Black Diamond and Gregory and their respective customers or demand for products;
(viii) our ability to implement our acquisition growth strategy or obtain
financing to support such strategy; (ix) the loss of any member of
our senior management or certain other key executives; and (x) our ability to
utilize our net operating loss carry forward. Additional factors that
could cause Clarus’ results to differ materially from those described in the
forward-looking statements can be found in the “Risk Factors” section of Clarus’
filings with the Securities and Exchange Commission, including its latest annual
report on Form 10-K and most recently filed Forms 8-K and 10-Q, which may be
obtained at our web site at www.claruscorp.com or the Securities and Exchange
Commission’s web site at www.sec.gov. All forward-looking statements
included in this press release are based upon information available to Clarus as
of the date of this press release, and speak only as the date hereof. We assume
no obligation to update any forward-looking statements to reflect events or
circumstances after the date of this press release.