Utah gear maker Black Diamond Equipment Ltd. to join public company, buy backpack company

Utah gear maker acquired, to buy another company

SALT LAKE CITY — Outdoor gear maker Black Diamond Equipment Ltd. — which helped create an industry in Utah — will join a publicly traded company and buy Sacramento, Calif.-based Gregory Mountain Products Inc., a manufacturer of specialized backpacks.

Black Diamond chief Peter Metcalf said the combination will raise capital and create a lasting company that can compete on the global stage with bigger players.

The $135 million deal announced Monday is being engineered by Stamford, Conn.-based investors Clarus Corp.

Clarus said it was paying $90 million in cash for Black Diamond and $45 million for Gregory Mountain Products. Half of the Gregory payment will be in stock at $6 a share and the rest in a seven-year, 5-percent note.

The outdoor equipment and lifestyles market has continued to grow despite the global recession, and Black Diamond has posted an average 14 percent growth over the past 21 years.

Metcalf, a Black Diamond founder, president and CEO, will run the new company under Black Diamond’s name from its headquarters and factory in Salt Lake City.

Black Diamond, a tiny startup when it arrived in Utah in 1991, had sales of $86 million in 2009 on technical climbing and skiing gear and employs 375 people.

Metcalf created the company out of the bankruptcy of Chouinard Equipment with help from “a motley assortment of friends, family and fools, retailers and suppliers,” he recounted Monday.

“We need capital,” Metcalf said. “We haven’t put capital into this business since I started it in 1989. We have big operations in Asia and Europe and we’re moving into the ski-boot business.”

Gregory, which specializes in sales of innovative backpacks, posted sales of about $27 million last year.

Clarus is an $87 million publicly traded corporate shell — an investment vehicle with no operations or revenue, which formerly dealt in e-commerce software services, according to the company and financial data provider CapitalIQ. Clarus sold all of its operating assets in 2002, banking the proceeds for new business opportunities. It had been looking for companies to buy or combine.

“We’ve been interested in outdoor industry for a long time, largely because we believe in the trends toward wellness and environmentalism,” Clarus executive Chairman Warren B. Kanders told investors in a conference call Monday. “We believe these brands create a unique platform to build a large, global, diversified company in the outdoor equipment and lifestyle markets.”

Kanders and Gregory’s vice chairman, Robert R. Schiller, are former partners who expanded Armor Holdings Products LLC of Jacksonville, Fla., which makes vehicles and Kevlar body vests, helmets and backpacks for the U.S. military.

In 2007, they sold Armor to London-based BAE Systems for $4.5 billion. That sale included Gregory Mountain Products, which Kanders and Schiller are buying back from BAE for the merger with Black Diamond Equipment.