Orange County Business Journal

Billabong Update: Talks With Private Equity Advance

Kari Hamanaka Tuesday, June 25, 2013

Shares of Irvine-based Billabong USA's parent surged on Tuesday in Australia after the action-sports apparel maker and retailer said talks with two private equity firms continue and “are well advanced.”

Australia-based Billabong International Ltd. is in separate talks with private equity firms Altamont Capital Partners of Palo Alto and Sycamore Partners of New York related to alternative refinancing and asset sales.

The company said it was providing the update in response to shareholder inquiries.

The news was enough to send the company's stock up about 46% to a market value of $86.74 million.

Billabong International said earlier this month it was looking into a sale of its Canadian retail chain West 49 along with refinancing after talks to sell the company stalled earlier this year.

Billabong International continues to face a challenging business environment, particularly with retail in Australia along with slow sales for its namesake brand in Europe.

The Americas continues to be a bright spot with the business continuing to improve, the company said.

Billabong International cuts its guidance on earnings before interest, taxes, depreciation and amortization for the 12 months through June to be between $65.4 million to $72.2 million. That compares with previous EBITDA guidance in the range of $72.2 million to $82.9 million.