SummitPost.org

This news is circulating around this morning. A couple articles below.

Clarus to Acquire Black Diamond Equipment and Gregory Mountain Products

Black Diamond and Gregory Mountain Acquired by Publicly-Traded Clarus Corp

$90 million for Black Diamond doesn't seem like a lot... It said their annual rev in 2009 was $86 million.

Interesting. I hope the quality won't go down.

Letter from Peter Metcalf about Black Diamond 2.0

I would have believed the value of the name and reputation would make BD worth more than $90M

It is all about margins folks, not gross revenue...if you have not noticed, those days are gone.....it is now about tangible P&L and book value, gross revenues are meaningless. Sounded like plenty to me.

mtngeek wrote:Letter from Peter Metcalf about Black Diamond 2.0

I would have believed the value of the name and reputation would make BD worth more than $90M

Yeah, but on the other hand, Peter M. and Co. are staying in control of the new BD, for now, and will have about a 30% stake in the new company. Not quite a full buyout and walk-away deal.

Don't know, sounds like it was some sort of reverse merger into an empty shell company. Clarus had no operations, and the only value was they're publicly listed. Just the way BD to go public without an IPO - sounds like early investors needed a way to cash in...

$10 says you'll be seeing BD gear in Wal/K-Mart by the middle of the summer!

The Chief wrote:$10 says you'll be seeing BD gear in Wal/K-Mart by the middle of the summer!

agreed...except is Kmart still in operation Rick? sry, I wouldn't know if they were, but have not heard or seen hide nor hair of them for ages.

welle wrote:Don't know, sounds like it was some sort of reverse merger into an empty shell company. Clarus had no operations, and the only value was they're publicly listed. Just the way BD to go public without an IPO - sounds like early investors needed a way to cash in...

Ding-ding-ding! We have a winner, folks. Not that there's necessarily anything inherently wrong with using a purchase by a listed company as a way to go public.

My question is: what the hell has Clarus been doing for the last eight years? The press release said they sold off their legacy e-commerce bidness back in December 2002.

It's taken them this long to find a suitable company to buy as part of their "asset redeployment strategy"...? Way to git 'er done!

Dow Williams wrote:

The Chief wrote:$10 says you'll be seeing BD gear in Wal/K-Mart by the middle of the summer!

agreed...except is Kmart still in operation Rick? sry, I wouldn't know if they were, but have not heard or seen hide nor hair of them for ages.

That is our main source of general goodies here in Bishop, CA!

That is the primary reason why my Wife and I dress up once a week and head on down into "Town"!

The Chief wrote:

Dow Williams wrote:

The Chief wrote:$10 says you'll be seeing BD gear in Wal/K-Mart by the middle of the summer!

agreed...except is Kmart still in operation Rick? sry, I wouldn't know if they were, but have not heard or seen hide nor hair of them for ages.

That is our main source of general goodies here in Bishop, CA!

That is the primary reason why my Wife and I dress up once a week and head on down into "Town"!

Sh_it, I thought you had to be pulling my leg so I googled it, I'll be damned, on main street no less.

Adayak wrote:

"$90 million for Black Diamond doesn't seem like a lot. It said their annual revenue for 2009 was $86 million"

Companies are valued by their earnings not their sales figures (revenue). Companies that have a decent reputation, are well established in their marketplace, and have solid financial results typically go for 7 to 15 times their annual earnings depending on a lot of variables.

So at the end of the day, what do we expect to happen with DB? What typically happens to companies that go through these kinds of deals?

Should we expect to see little change? Or is it more likely that they'll start making crap and marketing that crap to a larger audience?