Online sportswear retailer SurfStitch has splashed out $23.7 million on buying global water board sports distributor Surf Hardware International.
Surf Hardware owns four popular global brands - FCS, Gorilla, Hydro and Softech - and is a market leader in the Asia-Pacific, US, Europe and Japan.
"SHI's continuous innovation has created a portfolio of globally recognised brands and high-performance products that have immense appeal to SurfStitch Group's youth demographic," Surfstitch said in a statement on Wednesday.
The company said SHI's product range will give Surfstitch greater exposure to the action sports hard goods market, which is one of SurfStitch's fastest growing categories.
The acquisition will be paid 100 per cent in cash.
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A fully-underwritten institutional placement of ordinary shares to raise about $50 million has been launched to fund the repayment of certain debts of SHI as part of the acquisition and transaction costs, the company said.
SurfStitch expects its full-year underlying earnings, including its recent acquisition, to be in the range of $18 million to $22 million.
Its guidance, excluding SHI, remains between $15 million to $18 million.
SurfStitch shares are in a trading halt while it carries out the capital raising. The stock last traded at $2.06.
