New Wave Group Acquires the Craft North America Business from Karhu North America
New Wave Group AB, the Swedish parent company of suppliers such as Cutter & Buck, Ahead Inc. and Sagaform, has acquired the rights to distribute its CRAFT line of sportswear products from Karhu North America. Karhu North America has been the exclusive distributor in the United States and Canada of products under New Wave Group AB's sports brand CRAFT since 1999.
The transaction, done through New Wave Group's wholly owned subsidiary New Wave USA Inc, is structured as an asset acquisition. The initial purchase price amounts to $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 $4.75 million. Three Karhu employees will transfer in connection with the acquisition.
The acquired business will be managed by a newly founded U.S. 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, Mass. 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 U.S. 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 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.
Because the acquired business has been operated within Karhu North America'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 $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 $700,000.
For more information, visit New Wave Group's homepage.