Outside Business Journal

Black Diamond to Acquire Winter Safety Brand Pieps for $10.4 Million

Black Diamond Inc. continued in its acquisition mode, announcing plans Monday to acquire Austria-based Pieps, best known for its avalanche transceivers, probes, and other winter safety gear. OBJ has the first interview with Black Diamond CEO Peter Metcalf, plus details on why winter safety is a top bright spot for the wintersports market

David Clucas

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Black Diamond Inc. continued in its acquisition mode, announcing plans Monday to acquire Austria-based Pieps, best known for its avalanche transceivers, probes, and other winter safety gear.

“It’s an iconic company when you think of the history of avalanche transceivers,” Black Diamond Inc. CEO Peter Metcalf told Outside Business Journal. “Avalanche safety has been at the core of Black Diamond for 25 years, and for the past 15 years we’ve looked at bringing beacons into our portfolio. What we realized is that it is a very specialized product with sophisticated electronics. Six months ago, they approached us … it was an opportunity … we went with the expertise and history of Pieps.”

Black Diamond will pay about EU 8 million ($10.4 million) for Pieps, which was founded in 1972, and since 2007, has been owned by a diversified electronics company Seidel Elektronik. There’s an additional EU 2 million ($2.6 million) incentive on top of the purchase price that Black Diamond will pay, if Pieps meets “aggressive sale numbers” during the next three years, and Black Diamond will assume about EUR 2.1 million ($2.7 million) of Pieps’ debt, Metcalf says. For its 2011/2012 fiscal year, Pieps reported sales of about EU 6.2 million ($8 million). The deal is expected to close October 1, 2012.

Black Diamond will retain Pieps’ headquarters, leadership, design and branding in Graz, Austria, along with its 20 employees, including managing director Michael Schober and product manager Markus Eck.

Outside of Austria and Germany, changes will be forthcoming for Pieps’ global sales and distribution structure. The brand currently works with a collection of independent global distributors, such as through Liberty Mountain in North America. Those contracts will run out and then be taken over by Black Diamond’s distribution network, Metcalf said. The company can help Pieps grow its sales globally through Black Diamond’s direct distribution offices in the U.S., throughout the rest of Europe, Asia and South America, he said.

The purchase of Pieps reinforces a recent surge of consumer activity and investment toward winter safety products. In July 2011, the parent company of Deuter purchased winter safety brand Ortovox. And OBJ noted the flood of outdoor brands getting into winter safety at last year’s Outdoor Retailer Winter Market and SIA Snow Show, along with increased media attention.

“It’s the same reason why sales of free-heel skis and backcountry bindings are on the rise,” Metcalf said. “The ski and snowboard industry, overall, hasn’t grown that much, especially with the traditional lift-served products, but if you look at backcountry, sidecountry and off piste, those are the bright spots. People love adventure and powder, but they also recognize the increased danger. The way they respond is to have a beacon, a probe, a shovel, an Avalung.”

Pieps (pronounced “peeps”) is best known for its avalanche transceivers. It recently debuted the Vector (pictured above), which incorporates GPS along with the traditional radio signals to help search for buried victims and provide location communication among fellow skiers. The company also recently introduced its Globalfinder product for summer outdoor activities in non cellular areas, allowing for navigation, emergency location, and satellite-driven text communication. Pieps also makes backcountry probes, shovels, packs, and a limited line of clothing.

The acquisition of Pieps is the second for Black Diamond Inc. in four months—in early June, the company purchased ski and action sport protection brand Poc Sports for $43.5 million, adding to its existing family of Black Diamond and Gregory Mountain Products.

“Poc was the example of a great acquisition for Black Diamond to open some doors for us into their category and market, broadening our customer base,” Metcalf said. “Whereas Pieps is more about fortifying and reinforcing some gaps in our portfolio with marginal redundancy and high synergy.”

The acquisitions continue to move the Black Diamond family toward a complete outdoor and wintersports company. Further rounding out that portfolio, the Black Diamond brand will introduce its new line of apparel in fall 2013. That leaves footwear (outside of BD’s line of ski boots) as a notable missing piece, which Metcalf readily admitted when asked by OBJ. Many in the industry suspected that at least one these latest two acquisitions would have involved that category.

“Footwear definitely will be a wonderful future opportunity for us,” Metcalf told OBJ. “It’s a big project, though, and there’s a limit to what we can handle at one time. But certainly down the line there will be opportunities, either organically, developing it ourselves, or acquisitively, purchasing a brand.”