👉 Background: It’s fair to say Billabong and Quiksilver are pretty iconic brands that hold a special place in the heart of most Aussies. Quiksilver was founded back in 1969 as a surf-inspired brand, while Billabong kicked off in 1973.
👉 What happened: In 2016, investor Oaktree Capital Management bought out Quiksilver from bankruptcy. And two years later, Oaktree snapped up Billabong and combined both companies (alongside Roxy, RVCA, VonZipper) under the one roof.
👉 What else: And now, it’s expected that the two parent brands, Quiksilver and Billabong, alongside its other brands will be sold for a lazy $1.9 billion to Authentic Brands Group. And if this deal lands, it highlights the enormous opportunities for distressed debt funds, like Oaktree.
💡Distressed debt funds, or vulture funds, are a type of an investment fund that looks to invest in distressed or struggling companies or assets.
💡Often, when companies are close to defaulting on loans, or companies are near bankruptcy, they become desperate for a saviour. The goal of these companies is to 'swoop in' and pick up shares at highly discounted prices.
💡Oaktree bought Billabong for $380 million and Quiksilver for $155 million. So a $1.9 billion sales in just 5 years is a pretty tasty return.
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