ASX-listed firm Super Retail Group buys Kiwi outdoor brand Macpac for $144m

The acquisition is expected to be completed on March 31.

ASX-listed Super Retail Group has bought New Zealand outdoor equipment brand Macpac for $144 million, more than twice the $68.7m paid by Australia's Champ Private Equity in 2015.

The deal adds 54 stores across Australia and New Zealand to Queensland-based Super Retail's suite, and is expected to generate sales of $95m and pro-forma earnings before interest, tax, depreciation and amortisation of $16m in the year ending March 31.

Super Retail will consolidate its Rays outdoor equipment brand under the Macpac badge, which will focus on small format stores reliant on apparel, large format stores offering an extensive range of apparel, footwear, equipment and accessories, digital channels offer the complete range and access to services, and a commercial channel.

"The Macpac business has performed extremely well over recent years, yet there remains a significant opportunity to grow the business in the near future through opening new stores and growing its digital and commercial channels," managing director Peter Birtles said in a statement to the ASX.

"The integration of the business with Rays provides an opportunity to position Macpac as the leading outdoor adventure specialist across Australia and New Zealand providing a much broader range of quality products, information and services than any other retail business."

Super Retail will fund the deal from existing debt, and has got its banking partners to increase that credit line by A$150m ($161.4m) to give the retail group headroom to pursue a broader omni-retailing strategy.

The ASX-listed company's shares dropped 14.5 per cent to close at A$7.03.

The acquisition is expected to be completed on March 31, and generate mid-single digit earnings per share gains for the ASX-listed firm.

Super Retail, which operates the BCF, Rays, Rebel and Super Cheap Auto retail brands, will take over the outdoor equipment chain after about two years in private equity ownership.

Champ bought a majority stake using its Champ Ventures 7 Funds vehicle to acquire the retailer, which targets equity investments of between $20m and $80m.

At the time of the sale to Champ, Macpac cornerstone shareholder and Kathmandu Holdings founder Jan Cameron kept a small stake with her former husband and Kathmandu co-founder Bernie Wicht, and Macpac chief executive Alex Brandon.

Cameron owned about 58 per cent of Macpac, having bought into the company for a reported A$20m in 2011 after her non-compete clause with Kathmandu ended.

Financial statements for holding company MP Finco show Champ paid $68.7m for Macpac, of which $62m was in cash and $6.8m in scrip. In the five-month period covered to March 31, 2016, the company generated an operating loss of $362,000 on revenue of $10.6m at a gross margin of 55 per cent.

Super Retail reported a 3 per cent decline in first half profit to A$72.2m on a 2.2 per cent gain in revenue to A$1.32 billion. The board declared an interim dividend of A21.5c per share, payable on April 3.