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Tindall, Fyfe, Moon big winners from Icebreaker sale

In 1994, a 24-year-old Kiwi marketing graduate named Jeremy Moon was travelling around New Zealand with his American girlfriend, when he had a chance encounter with a merino farmer.

The farmer showed him a prototype 100 percent merino fabric, which was unlike any wool Moon had come across before - soft, light, and warm, rather than coarse and scratchy.

Moon quit his research job, mortgaged his house and set up Icebreaker, eventually making it into one of New Zealand's best-known international brands.

Twenty four years later, the ramifications of that chance meeting (and some canny innovation, marketing and distribution decisions) have made Moon a pretty wealthy man. Overseas Investment Office documents show US apparel giant VF Corp paid $288 million for Icebreaker Holdings on March 13, after a competitive tender process.

Moon, who owned 6.4 percent of the company directly, will net $18.4 million, plus his share of the 22.5 percent stake he owned with his ex-wife Sarah Catherall - that's another $64.8 million. Sir Stephen Tindall's K One W One owned 9.4 percent, and will have netted $27 million. Icebreaker CEO Rob Fyfe, the former head of Air New Zealand, is reported to have owned around 4 percent. If true, that would have made his stake worth $11.5 million.

Drinks on those guys this month.

New Zealand investment fund managers Pencarrow Private Equity was the biggest shareholder, with a 38 percent stake it bought three years ago.

North Carolina-based VF Corp withheld the price paid when it announced the deal was completed with OIO approval. The acquisition added Icebreaker to VF's Smartwool brand, which the US firm said would position it as a global leader in merino wool and natural fibres.

Icebreaker's shareholders sought a tie-up with "an established international entity or group for global market access, logistics and management opportunities" to "fully realise Icebreaker's growth potential", a summary of the decision said. 

The foreign investment screening body was satisfied "the individuals who will control the investment have the relevant business experience and acumen and are of good character," and that they "demonstrated financial commitment to the investment," the summary said.

Icebreaker had annual sales of $220 million in the last financial year, of which 86 percent were from overseas markets. The deal is expected to immediately add to VF's earnings.

NYSE-listed VF Corp has a market capitalisation of around US$29.5 billion and its portfolio includes huge global brands like The North Face, Timberland, SmartWool, Vans, Wrangler and Lee. The company lifted 2017 revenue 7 percent to US$11.8 billion, generating a profit of US$615 million. It previously said the "purchase price is not material to VF."

Icebreaker signed a 10-year, $100 million supply contract with New Zealand merino wool growers a week after the deal was first announced in November, with the clothing company paying a premium to recognise grower loyalty and let the firm use farm imagery and storytelling in its global marketing efforts.

(BusinessDesk)

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