Zumiez Inc. (ZUMZ) has reached a definitive purchase deal to buy Blue Tomato, an European action sports retailer based in Austria, for a total purchase price of about 59.5 million euros, subject to certain pre-closing and post-closing adjustments. In addition to the purchase price, the agreement provides for an additional 22.1 million euros of contingent future payments based upon achieving certain performance objectives related to growth over the next three years.
The acquisition, funded by Zumiez's existing cash balances, is expected to be modestly accretive to earnings per share in fiscal 2012, excluding all acquisition and integration expenses. The transaction may close prior to the end of the second quarter of 2012. A portion of the contingent future payments are to be in the form of Zumiez stock.
Blue Tomato would continue to be headquartered in Schladming, Austria and senior management led by Gerfried Schuller will continue in their current roles.
Further, the company updated its current outlook. Based on better than planned sales, the company raised its guidance, now expecting fiscal 2012 second-quarter total sales of $134 million - $136 million, including some $2 million in sales of Blue Tomato assuming the acquisition is completed by July 1. Net income per share is projected at around $0.04 - $0.06, inclusive of acquisition related costs and expenses compared to the previously issued guidance of net income per share of around $0.04 - $0.06, which excluded the acquisition.
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