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 expected to be modestly accretive to earnings per share in fiscal 2012, excluding all acquisition and integration expenses. The acquisition 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.
Founded by former European Snowboard champion Gerfried Schuller in 1988, Blue Tomato operates one of Europe's largest action sports ecommerce websites, which is available in 14 different languages.
Additionally, the company operates 5 stores in Austria. Blue Tomato sells an extensive and diverse mix of branded snow and skate hard goods, apparel, footwear, and accessories across Europe.
For the fiscal year ended April 30, 2012, Blue Tomato reported a net sales increase of approximately 27% to EUR 29.4 million with roughly 75% generated through ecommerce. Blue Tomato reported EUR 3.5 million of net income for the year ended April 30, 2012. All Blue Tomato results are reflected in accordance with Austrian generally accepted accounting principles.
Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, "Joining forces with Blue Tomato represents the next step in our strategic plan to build the leading global action sports retail business.
Europe has a large, vibrant and growing action sports community, which Gerfried and his team have skillfully tapped into through a broad offering of authentic brands and products, a differentiated retail experience, and superior customer service.
The similarities between each organization's culture and operating philosophies give us great confidence we can successfully leverage our combined expertise to selectively expand Blue Tomato's European footprint and strengthen our foundation to support future international development."
Blue Tomato will continue to be headquartered in Schladming, Austria and senior management led by Gerfried Schuller will continue in their current roles.
Gerfried Schuller commented, "When I decided to sell the company I could not imagine a better fit for how we operate than Zumiez. 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. Starting today, Zumiez and Blue Tomato are ready to begin a new journey to become the world's leader in action sports retailing."
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