Black Diamond Owner Clarus To Acquire Rhino-Rack

Clarus Corporation has announced it has entered into a definitive agreement to acquire Australia-based Rhino-Rack Pty Ltd (“Rhino-Rack”), a leading manufacturer and distributor of highly-engineered automotive roof racks, trays, mounting systems, luggage boxes, carriers, and accessories, for an aggregate purchase price of approximately $USD 198 million ($AUD 255 million).

  • Transformative Acquisition Aligns with Clarus’ Global “Super Fan” Strategy and Expected to Add Significant Scale,
  • Global Reach and Compelling Growth Opportunities
  • Acquisition Expected to be Immediately Accretive -

Rhino-Rack will continue to operate independently as a wholly-owned indirect subsidiary of Clarus and will constitute a third reporting segment associated with mobile solutions for outdoor adventure.

The purchase consideration is comprised of $USD 150 million ($AUD 194 million) cash and approximately 2.3 million shares of Clarus common stock calculated pursuant to the terms of the purchase agreement.

Richard Cropley, Rhino-Rack’s founder and Managing Director, is anticipated to be a top five shareholder of Clarus following the completion of the transaction. In addition, an earn-out of $USD 8 million ($AUD 10 million) in cash is payable on July 31, 2022, contingent on the achievement of a specified revenue target. The Company expects the cash consideration to be financed through the upsizing of the Company’s existing credit facility led by J.P. Morgan. The acquisition of Rhino-Rack is expected to be immediately accretive to Clarus following closing.

Headquartered in Sydney, Australia and founded in 1992 by Mr. Cropley, Rhino-Rack is an iconic brand that embodies the Clarus’ Super Fan ethos. Rhino-Rack has leading market share for its core products in Australia and New Zealand with a growing presence globally, particularly in the U.S., and is best known for its superior “north / south” roof rack designs with best-in-class solutions that “make space for adventure.” Customers rely on Rhino-Rack to transform their vehicles for work, play, or anything in between. Rhino-Rack has well-established routes to market through a combination of long-standing distributors, retail relationships, OEM partners, third-party e-commerce sites and growing direct-to-consumer presence.

For the trailing twelve-month period ended March 31, 2021, Rhino-Rack generated approximately $USD 90 million ($AUD 115 million) in net sales and approximately $USD 16.7 million ($AUD 21.5 million) of Adjusted EBITDA. Approximately 80% of Rhino-Rack’s sales came from Australia and New Zealand, and 20% from North America.

John Walbrecht, President of Clarus, said, “Rhino-Rack is truly a unique brand and one that we view as perfectly aligning with our Super Fan brand acquisition strategy. Since its founding, Richard has built a durable business with leading brand and market positions, a customer-centric focus, and an affinity for protecting and funding an important cause related to rhinoceros conservation. Immediately following the closing of the transaction, we intend to expand Rhino-Rack’s product penetration in North America, organically grow in its core Australia and New Zealand markets, and capitalize on our existing network of key distributors and dealers to develop sales in the rest of the world. We are excited to welcome the entire Rhino-Rack team to Clarus as we continue our shared vision of providing consumers with the best engineered products designed to get them from their homes to their adventures.”

Richard Cropley, founder and Managing Director of Rhino-Rack, said, “When we founded Rhino-Rack, we set out to create world-class roof racks for outdoor enthusiasts. After three decades, we have developed a deep heritage and a loyal and passionate user base, which we have expanded into a variety of other products and markets. We are excited to have a partner that shares our commitment to innovation and has a track record of growing successful brands across categories, regions, and channels. Clarus will continue Rhino-Rack’s legacy of manufacturing products with the superior design and engineering that our customers have come to expect and trust.”

Warren Kanders, Executive Chairman of Clarus, said, “Rhino-Rack is an important and major addition to our strong portfolio of brands. We look forward to building on and accelerating Rhino-Rack’s growth through product innovation, further investment in engineering, operational excellence, and disruptive marketing. It is an added benefit that we have the opportunity to partner with someone of Richard’s caliber and character, and we are eager to work with his family and the entire Rhino-Rack team during this exciting next phase.”

The transaction is expected to close in July 2021, subject to customary closing conditions as well as certain regulatory approvals in New Zealand. Following the closing of the transaction, the Rhino-Rack management team will continue to run the business from Rhino-Rack’s headquarters in Sydney, Australia.

Clarus expects to provide additional information on the Rhino-Rack transaction in connection with its second quarter conference call expected to be held in August 2021.

Stifel served as financial advisor to Clarus and Baker McKenzie in Australia served as legal advisor to Clarus. Deloitte Corporate Finance in Australia served as financial advisor to Rhino-Rack and Ash Street Partners served as legal advisor to Rhino-Rack.

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