Volcom Sells Out To PPR For $607.5 Million

by The Editors on May 2, 2011

Volcom-Stone-LogojpgFrench fashion giant PPR, the parent company of brands like Gucci, Bottega Veneta, Yves Saint Laurent, and Puma, has announced its intention to purchase 100 percent of the shares of Volcom for $24.50 a share “for a total equity value of $607.5 million and an enterprise value of $516.1 million.”

Not surprising the Volcom Board of Directors “has unanimously recommended” that shareholders take the money and run. This explains so much. . .

“PPR is the perfect partner to help take the Volcom and Electric brands to the next level of success,” says Volcom Chairman and CEO Richard Woolcott. “For more than 20 years we have worked to inspire a movement that provokes freedom of thought and expression, and celebrated this spirit through our athletes, worldwide events, rock tours, feature films and, of course, our apparel. PPR, with its expertise gained through both Puma and its Luxury Group, could bring international market knowledge, sourcing capabilities and other operational expertise in areas such as product development and retailing to help the company grow Volcom globally, while preserving the elements that make the brands authentic.”

That means Wooly’s shares alone are worth approximately $61.5 million. How’s that for an exit strategy? Follow the jump for the official details on how Volcom will become a French fashion brand.

PPR TO ACQUIRE VOLCOM, INC. FOR $24.50 PER SHARE IN CASH

PPR to Host Conference Call today at 3:00 p.m. CET

PARIS, France & COSTA MESA, Calif.– Monday, May 2, 2011 – PPR (FR 0000121485, PRTP.PA, PPFP) and Volcom, Inc. (NASDAQ: VLCM) today jointly announced that they have signed a definitive merger agreement whereby a new wholly owned subsidiary of PPR will make a cash tender offer to acquire 100% of the shares of Volcom for a price of $24.50 share, for a total equity value of $607.5 million and an enterprise value of $516.1 million. The acquisition represents an important transaction for PPR in its Sport & Lifestyle Group, providing PPR with a leading active apparel brand with a heritage in skateboarding, snowboarding, and surfing.

The Volcom Board of Directors has unanimously recommended that Volcom shareholders accept and tender their shares into the offer, which represents a 37% premium over the three-month average trading price of Volcom shares. The offer is subject to customary conditions, including tender of a majority of the outstanding shares into the offer (on a fully diluted basis), and applicable regulatory approvals. Certain Volcom directors and officers, who collectively own 14.4% of the outstanding shares, have agreed to tender all of their shares in the tender offer. The transaction is expected to be completed during the third quarter of 2011.

“Volcom is arguably one of the most desirable global action sports brands with an authentic legacy rooted in surf, skate, and snow sports,” said François-Henri Pinault, Chairman and Chief executive officer of PPR. “We admire Volcom’s brand management capabilities and the unique voice in which it speaks to its customers, expressed in high-quality, fashion-forward, innovative apparel and accessories. Volcom is complementary to Puma and we are convinced that its integration into our Sport & Lifestyle Group will speed up its development.”

Richard Woolcott, Volcom’s Chairman and Chief executive officer, said, “PPR is the perfect partner to help take the Volcom and Electric brands to the next level of success. For more than 20 years we have worked to inspire a movement that provokes freedom of thought and expression, and celebrated this spirit through our athletes, worldwide events, rock tours, feature films and, of course, our apparel. PPR, with its expertise gained through both Puma and its Luxury Group, could bring international market knowledge, sourcing capabilities and other operational expertise in areas such as product development and retailing to help the company grow Volcom globally, while preserving the elements that make the brands authentic.”

Advisors
Peter J. Solomon Company acted as financial advisor, and Wachtell, Lipton, Rosen and Katz acted as legal advisors to PPR. Wells Fargo Securities, LLC acted as exclusive financial advisor to the Board of Directors of Volcom, and Latham & Watkins LLP acted as legal advisor to Volcom.

Conference call details
PPR will host a conference call to discuss the proposed transaction at 3:00 p.m. CET today.

Conference call dial-in:

From France +33 (0) 1 70 99 42 86
From the UK +44 (0) 20 7138 0843
From the US +1 212 444 0896
Access code: 4088419

Replay dial-in:

From France +33 (0) 1 74 20 28 00
From the UK +44 (0) 20 7111 1244
From the US +1 347 366 9565
Access code for the replay: 4088419# (available until May 22, 2011)

Volcom’s Pending Q1 Financial Results and Conference Call
Volcom will release its 2011 first quarter financial results as planned tomorrow at approximately 4:00 p.m. ET, immediately following the closing of regular stock market trading hours. However, given today’s news, the company will not host a conference call to review the results as previously announced.

About Volcom, Inc.
Volcom is an innovative designer, marketer and distributor of premium quality young mens and womens clothing, accessories and related products. The Volcom brand, symbolized by The Stone , is athlete-driven, creative and forward thinking. Volcom has consistently followed its motto of “youth against establishment,” and the brand is inspired by the energy of youth culture. Volcom and Electric branded products are sold throughout the United States and internationally. Volcom’s news announcements and SEC filings are available through the company’s website at www.volcom.com.

About PPR
PPR nurtures a group of high-growth global brands distributed in more than 120 countries. Through its Consumer and Luxury brands, PPR generated revenue of €14.6 billion in 2010, and had approximately 60,000 employees at December 31, 2010. The PPR share is listed on Euronext Paris (FR 0000121485, PRTP.PA, PPFP). To explore the PPR brand universe, please visit www.ppr.com: the Luxury group (Gucci, Bottega Veneta, Yves Saint Laurent, Balenciaga, Boucheron, Sergio Rossi, Alexander McQueen and Stella McCartney), Puma, Fnac and Redcats (La Redoute, The Sportsman’s Guide, The Golf Warehouse …).

Notice to Investors
This announcement is neither an offer to purchase nor a solicitation of an offer to sell securities. The tender offer for the outstanding shares of Volcom common stock described in this press release has not yet commenced. At the time the planned offer is commenced an indirect, wholly-owned subsidiary of PPR will file a tender offer statement on Schedule TO with the Securities and Exchange Commission and Volcom will file a solicitation/recommendation statement on Schedule 14D-9 with respect to the planned offer. The tender offer statement (including an offer to purchase, a related letter of transmittal and other offer documents) and the solicitation/recommendation statement will contain important information that should be read carefully before any decision is made with respect to the tender offer. Those materials will be made available to Volcom security holders at no expense to them. In addition, all of those materials (and all other offer documents filed with the SEC) will be available at no charge on the SEC’s Web site: www.sec.gov.

Note on Forward-Looking Statements
Certain statements either contained in or incorporated by reference into this document and oral statements made from time to time by representatives of the company are forward-looking statements that involve risks and uncertainty. Future events regarding the proposed transactions and Volcom’s actual results could differ materially from the forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding the combined companies’ plans following, and the expected completion of, the proposed acquisition. These forward-looking statements involve certain risks and uncertainties that could cause actual results and the timing of events to differ materially from those indicated in such forward-looking statements and generally include statements that are predictive in nature and depend upon or refer to future events or conditions. Risks and uncertainties include the ability of Volcom to complete the transactions contemplated by the merger agreement, including the parties’ abilities to satisfy the conditions to the consummation of the proposed acquisition; the possibility of any termination of the merger agreement; the timing of the tender offer and the subsequent merger; uncertainties as to how many of Volcom’s stockholders will tender their shares of common stock in the tender offer; the possibility that various other conditions to the consummation of the tender offer or the subsequent merger may not be satisfied or waived, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the acquisition; other uncertainties pertaining to the business of Volcom; further softening of the retail environment, sales of our products by key retailers, changes in fashion trends and consumer preferences, general economic conditions, including the continuing global economic uncertainty, the impact of sourcing costs, and additional factors detailed in Volcom’s public filings with the SEC from time to time, including Volcom’s most recent Annual Report on Form 10-K for the year ended December 31, 2010, Quarterly Reports on Form 10-Q and its subsequently filed SEC reports, each as filed with the SEC, in each case, which contains and identifies important factors that could cause actual results to differ materially from those contained in the forward-looking statements. The reader is cautioned not to unduly rely on these forward-looking statements. Volcom expressly disclaims any intent or obligation to update or revise publicly any forward-looking statements except as required by law.

{ 22 comments… read them below or add one }

yeah right May 2, 2011 at 6:55 am

sold out long ago. This is a good thing, now they can be the brand they actually are and sell at kohls and pennys.

matt meyerson May 2, 2011 at 10:41 am

hope my clients won’t have to wear berets and fur coats now

TOAD May 2, 2011 at 11:08 am

What ever happen to “Youth Against Establishment”

SK May 2, 2011 at 12:45 pm

The youth grew up

yeah right May 2, 2011 at 2:15 pm

no the youth sold out . Money isnt everything wooly. What started out cool is now something lame

uh huh May 2, 2011 at 2:33 pm

Whats lame are clowns talking shit about a company as successful as this! Good for all the boys at Veeco!!

Coffee + Ciggarettes May 2, 2011 at 2:42 pm

Once they went public, they changed tunes from Y@E Corp to Global Domination Corp. Its like war with surf compnies to see who can expand fastest. VeecoGDC needed to make moves like this to compete on battlefield Earth with Nike/Hurley. Now they will have the $ to hold on to guys like Shaun White and Sheckler.

Mr Big May 2, 2011 at 3:08 pm

I like the idea of the Gucci Stone .

Pepe Le Pue May 2, 2011 at 5:24 pm

Le juene contre le etablissement…. pour beaucoup d’argent!

Mr Big May 2, 2011 at 8:11 pm

C’est Vrai Monsieur

Yeah right May 2, 2011 at 9:08 pm

The truth hurts huh uh huh
Volcom has been going down the wrong road for at least three years now. They have sold their souls. I hope they feel the money was worth it. I say good riddance

REAL DEAL May 3, 2011 at 12:38 am

Volcom is a by-product of Quiksilver.

The difference is that Quicksilver makes the mistakes and Volcom get’s to learn from big brother.

The interesting fact about all this is how Danny Kwock was able to serve as an executive at Quiksilver and invest into Volcom while being an insider at Quicksilver.

I’m sure everything Voclom and Danny Kwock has done is totally legal……

I wonder who is going to bail out QUIKSAND…I mean Quiksilver……

Volcom got paid, and will sail off to the good life with millions.

Thanks for nothing YAE…..

Good for them May 3, 2011 at 1:05 pm

All this Y Against Establ is great for the 12-24 year olds, but once they hit 30 and decide that having a decent set of wheels, a roof over their head and that you want to make babies with your girlfriend, putting stickers on your board and flipping burgers (or working in the industry) for 30K a year soon becomes a bit less appealing.

Good for Wooly and the Volcom team for working their ass off for over the last decade to build a property worth 600 million. Cash out and start something new if you really want to run a core company. Just do it with 50 million in the bank so you can take your family to Tavarua.

blackberry May 3, 2011 at 6:27 pm

Wow! The power still is behind the brand… Build anotherone like Volcom… In other life! Congratulations!!!

yeah right May 4, 2011 at 7:30 am

just to be clear, I give wooly credit for building the brand, but If I worked my ass off for 20 years to build something cool like volcom was, and was making good money, like he was. I would not have gone public, and sold out what I worked so hard to build, then let it turn into something so lame that woman in dept store sell. Money isn’t everything

Randy May 4, 2011 at 11:17 am

Dude this is so Core!!!

Choppy June 16, 2011 at 2:22 pm

Snowball effect, you have to grow each year if you want to stay in business. As the ball grows you need to make complicated calculated moves that the smartest skater/surfers can’t comprehend. The business world is more difficult then you think. Volcom has done tons for the core movement, from brews martins to v-land, I’m proud of Volcom. Congrats to all who have served. Chop chop

yeah right June 16, 2011 at 5:43 pm

sorry choppy,
they are sell outs, it not as complicated as you think. Just have to play the mental game. I have no respect for the brand. They did the right thing by selling it though. Also they haven’t done shit for the core market for close to ten years except screw us over. or abandon it , whichever you prefer.

Drew Toonz March 2, 2012 at 2:42 pm

Does this mean i get a raise? VOlcom for life. Haters- VOlcom aint goin nowhere!

truth hurts March 5, 2012 at 8:46 am

no one said volcom is going away, especially now that gucci owns it. They just said they sold out, which is true. If you didn’t have stock options , I doubt you will get a raise. In fact, I would guess them to make cuts, so will see how stoked you are on veeco after that. I hope you didn’t get a stone tattoo on your forearm!

F#%k Volcom May 5, 2012 at 6:02 pm

I say FUCK ‘EM.

CORE!?, I don’t know what you mean by that, because those ASSHOLES! won’t sell to CORE shops, but only fancy boutiques and department stores

Real Surfer September 25, 2012 at 10:18 am

The kids are already trashing them everywhere. They were giving shirts away on the beach this weekend and all the kids ran up and took all the shirts from the reps and then put them in the fire pits on the beach and burnt them…chanting Volcom sucks….sell outs!
we will see them in Walmart this holiday and they will be gone in a year!

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