Report: Zumiez buys Blue Tomato for USD 75m

Zumiez Inc. has confirmed the acquisition of Austrian fashion retailer Blue Tomato for USD 75 million. "Joining forces with Blue Tomato represents the next step in our strategic plan to build the leading global action sports retail business," Rick Brooks,

CEO of Zumiez, said in a statement.

The total purchase price for Blue Tomato will be EUR 59.5 million (USD 75 million), subject to certain pre-closing and post-closing adjustments. In addition to the purchase price, the agreement provides for an additional EUR 22.1 million of contingent future payments based upon achieving certain performance objectives related to growth over the next three years.

The acquisition, which will be funded by Zumiez's existing cash balances, is projected to 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.

In addition to the purchase price, Zumiez also will pay an additional $27.8 million contingent on Blue Tomato achieving certain performance goals over the next three years. Zumiez shares hiked to a four-year high Tuesday before closing at $41.16, up $1.79 for the day.

"We have built the leading action sports retail company in Europe and now we will be a part of the leading action sports retailer in the United States," Blue Tomato's Schuller said.

Blue Tomato was founded in 1988 by European snowboard champion Gerfried Schuller. The company operates a robust sports retail website, accessible in 14 languages, and operates five stores in Austria. Blue Tomato carries an extensive selection of snow and skate goods and apparel.

Blue Tomato will continue to be headquartered in Austria. Senior managers of the company will be led by Schuller, informed the European retailer.  For the fiscal year ending April 30, Blue Tomato reported a sales increase of 27 percent to $37 million. Roughly 75 percent of those sales came through Blue Tomato's website. Blue Tomato's net income for the year ending April 30 was about $4.4 million.