MELBOURNE (Reuters) - Australia’s Rip Curl surfwear company has hired Bank of America Merrill Lynch (BAC.N) to advise on a possible sale of the privately owned company, a source said, while its larger rival Billabong International Ltd (BBG.AX) mulls two private equity bids.
Rip Curl, founded in 1969 by two friends near the surfing haven of Bells Beach southwest of Melbourne, could fetch up to A$480 million ($506 million) in a full sale, the source familiar with the situation said, declining to be identified as the matter is confidential.
Rip Curl is one of the largest global surfwear brands, competing with Billabong and Quiksilver Inc ZQK.N, which was also founded near Bells Beach in 1969 but listed in the United States in 1986.
Billabong, which is struggling after a debt-fuelled global expansion just before the financial crisis hit, has had two takeover offers worth $700 million, from U.S. private equity firm Bain Capital LLC and from TPG Capital TPG.UL. Both are examining Billabong’s books.
Rip Curl is a manufacturer and retailer, with stores in Australia and New Zealand, the United States and Canada, Europe and South America. It has one main brand, unlike Billabong, which owns many brands.
It is forecast to have fiscal 2013 earnings before interest, tax, depreciation and amortization of A$48 million.
Its founders took over an old house in the seaside town of Torquay and bought a pre-World War II sewing machine to start production of wetsuits, according to the company’s web site.
Reporting by Victoria Thieberger; Editing by Lincoln Feast, John Mair and Ryan Woo