The Australian parent company of Irvine-based clothing maker Billabong USA could be a possible takeover target, according to an analyst.
Billabong International Ltd.’s market value and collection of “well managed brands” make it a potential acquisition amid an expected pickup in retail deals, Deutsche Bank AG analyst Alexi Baker-McLennan wrote in a note to clients.
The company’s Australian shares are 30% lower than their 12-month high hit last spring, which could allow a buyer to pick up Billabong at a discount, the analyst said.
Billabong, which makes clothes inspired by surfing and skateboarding and also runs stores, had a recent market value of about $1 billion.
Profits that fluctuate with foreign currency exchange rates and spending on new stores could deter buyers, according to Baker-McLennan.
A buyout “of Billabong would not be for the faint-hearted,” she said.
The analyst didn’t name any potential suitors for Billabong.
Billabong USA has yearly sales of about $630 million and makes up half of its parent company’s annual revenue.
It’s the second largest maker of clothes inspired by surfing, skateboarding and snowboarding after Huntington Beach-based Quiksilver Inc.
Billabong USA makes clothes and other products under the Billabong, Element and Von Zipper brands, among others.
It has made several recent acquisitions.
Late last year, it bought Canadian retailer West 49 for $93 billion.
In July, Billabong USA bought Costa Mesa’s Rvca Clothing for undisclosed terms.
In May, Billabong bought Torrance-based Becker Surf & Sport, which runs four Orange County stores.
In 2009, Billabong bought San Clemente’s Swell.com, an online clothes seller.
