Cutter & Buck Inc. (NASDAQ:CBUK), a leading designer and marketer of upscale golf and sportswear in the United States, has signed a definitive agreement to be acquired by New Wave Group AB (OMX Stockholm Mid cap: NEWA B).
New Wave is a leader in the design and marketing of consumer products for the corporate promotional and consumer retail markets in Europe. The combination of the two companies provides Cutter & Buck Inc. a significantly expanded product offering for the United States market and gives New Wave Group AB an upscale golf & sportswear brand to distribute in Europe.
Under the terms of the agreement, which was unanimously approved by the boards of directors of both companies, Cutter & Buck Inc. shareholders will receive $14.38 per share of Cutter & Buck Inc. common stock for an aggregate consideration of $156.5m
“The two companies‘ brands are very complementary, allowing us to expand the distribution of Cutter & Buck’s brands in Europe and the New Wave Group’s brands in the United States,” said Goran Harstedt, New Wave Group AB’s deputy chief executive officer. “We identified Cutter & Buck Inc. as the company to carry some of our brands, especially New Wave and Clique, in the United States on the corporate promotional market because, like New Wave Group AB, they are founded on great customer service and operational excellence. In addition, they truly understand the markets we operate in. Moreover, we expect to reach substantial synergies within buying, products and distribution.”
“We are excited about the opportunities presented by this combination,” said Ernie Johnson, Cutter & Buck Inc.’s chief executive officer. “We will have access to proven products that should provide us significant growth in our current markets. In addition, this combination allows Cutter & Buck Inc. access to New Wave Group AB’s broad distribution network in Europe as well as New Wave Group AB’s exceptional product related resources throughout the world.”
The transaction is subject to a number of customary closing conditions, including approval by the shareholders of Cutter & Buck Inc. and the receipt of applicable regulatory approvals. The results of Cutter & Buck will be consolidated with New Wave Group AB’s financial statement from and after the closing, expected for the end of May 2007. The acquisition is expected to generate a positive effect on the financial results of New Wave Group for its current fiscal year.
Cutter & Buck Inc. designs and markets upscale sportswear under the brands “Cutter & Buck” “ANNIKA” and “CBUK”. The company sells its products primarily to golf and specialty retailers, corporations and international distributors and licensees. The company also sells directly to consumers through its wholly owned subsidiary, Cutter & Buck Inc. Direct LLC. Cutter & Buck Inc. products feature distinctive, comfortable designs, high quality materials and manufacturing and rich detailing.
Cutter & Buck Inc. has approximately 380 employees and during its latest financial year (May 1, 2005 – April 30, 2006) had net sales of $131m with an income from continuing operations before income taxes of $9.8m. Cutter & Buck Inc. had shareholders‘ equity of $70.3M as of January 31, 2007.
New Wave Group AB designs and markets clothing, accessories and gifts for the corporate promotional and consumer retail markets under several proprietary brands, including Orrefors, Kosta Boda, Sagaform, Craft, New Wave, Clique, ProJob, Jobman, Seger, Grizzly and James Harvest Sportswear. Through a network of approximately 10,000 independent distributors, the company sells its products throughout most countries in Europe, as well as in China.
New Wave Group AB has approximately 2,200 employees and during its latest financial year (January 1, 2006 – December 31, 2006) had net sales of SEK3,530m (approx. $512m) with an income from continuing operations before income taxes of SEK290m (approx. $42m). New Wave Group AB had shareholder’s equity of SEK1,311m (approx. $190m) as of December 31, 2006.