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Sports apparel, equipment maker plucked from bankruptcy in 1993 bought by industry giant K2

Marmot Mountain Ltd., the Santa Rosa maker of outdoor gear bought out of bankruptcy 11 years ago by its employees, has been acquired by sports equipment giant K2 Inc. for $84 million in cash and stock.

Marmot President and Chief Executive Officer Steve Crisafulli said Thursday the company will stay in Santa Rosa and he expects it to expand as Marmot takes on developing new apparel lines for K2 and its subsidiaries.

"It's a great opportunity for the workers at Marmot. It means more responsibility and opportunities," he said. "Our business and brand is very strong. We'll just continue to grow."

The transaction is the largest buyout of a nontelecom company in Sonoma County since Bear Stearns Merchant Banking of New York purchased Petaluma's CamelBak, a maker of water packs, for $210 million last year.

Marmot employs 100 people in Santa Rosa and about another 20 in Europe and Asia. In Santa Rosa, Marmot has its corporate offices, design team, marketing team, procurement, warehouse and U.S. distribution center. It also has warehouses and distribution facilities in Canada and the Netherlands.

Marmot was founded in 1974 in Colorado and moved to Santa Rosa in 1991. When the company that owned Marmot, Odyssey International, went bankrupt, employees bought Marmot in 1993. The following year it had sales of $12 million.

Since then, the company's sales have jumped fivefold and are expected to top $74 million this year.

Under the terms of the K2 buyout, the 45 employees who owned about half of the company will share $42 million in stock and cash. The other half of the company is owned by investors.

Marmot - which makes high-quality outdoor apparel and equipment, including outdoor wear, ski wear, tents, packs and sleeping bags - reported sales of $63 million in 2003. The company has a reputation for top-flight gear in an industry packed with thousands of small specialty manufacturers and a few big players.

The products are manufactured in Vietnam, Thailand, China and Bangladesh and are distributed in 34 countries.

K2 also signed acquisition agreements this week with two other sports companies, Volkl Sports Holding AG of Germany and Marker Group of New Hampshire, for about $124 million in stock, cash and assumed debt. Volkl makes skis and Marker makes ski bindings.

Based in Carlsbad, K2 has acquired more than a dozen sporting goods companies since 2002 when Richard Heckmann took over as chief executive officer. The company had sales in excess of $700 million in 2003.

The company is aiming to be a bigger player in the increasingly consolidated sporting goods retail market. It now includes 35 brands that offer products in snow sports, baseball, water sports, skating, backpacking and fishing.

This acquisition will allow K2 to expand into sales of sports apparel. Crisafulli said K2 is buying Marmot's apparel manufacturing know-how.

The transaction, which includes K2's assumption of Marmot's debt, is expected to be completed by June 30.

K2 shares closed up 36 cents at $15.46 on the New York Stock Exchange on Thursday.

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