K-Swiss Purchases FORM Athletics

Yesterday, it was officially announced that K-Swiss has purchased FORM Athletics from founder and CEO, Mark Miller.

California Sports Company K-Swiss (Nasdaq: KSWS) announced today the acquisition of Laguna Beach-based FORM Athletics. Terms of the deal were not disclosed.

FORM Athletics will operate as a division of K-Swiss led by Mark Miller, FORM’s incumbent founder and CEO. Under the agreement, Miller will become President of FORM Athletics, and has also been appointed President of K-Swiss Orange County (KSOC), where he will establish and lead a new division of the brand focused on the youth consumer. A force in the action sports industry, Mark Miller has built businesses for iconic brands for nearly three decades, launching M3 Snowboards in 1996, and more recently, playing a key role in the growth of DC Shoes, as SVP and General Manager in the Americas Region.

“Mark has incredible experience leading some of the most prominent action sports companies in history, and we are confident that he will create a progressive and successful program for K-Swiss,” said Executive Vice President of K-Swiss, David Nichols. “FORM plays well as a growth opportunity for our portfolio as Mixed Martial Arts is one of the fastest growing, and most relevant new markets in sports today. Viewership and participation in Mixed Martial Arts events is explosive, as is the market for Mixed Martial Arts consumer brands.”

Miller launched FORM Athletics in early 2010 in conjunction with MMA/WEC athlete and former Featherweight Champion Urijah Faber. The brand has quickly established itself as a successful and progressive Mixed Martial Arts (MMA) and lifestyle brand with a distinct surf-and-skate inspired aesthetic. Since its January debut, FORM has formed a global fan following, adding powerhouse athletes including Mark Munoz, Joseph Benavidez, and Jon “Bones” Jones to its roster.

Payout Perspective:

Just a few weeks ago, Billabong acquired RVCA and some people were questioning whether the company would be able to continue it’s commitment to the sport of MMA. Those concerns seem to be unfounded as Billabong is intent on maintaining the core essence of RVCA and its “artist network”.

I had the same concern when I first heard rumors that K-Swiss was looking to purchase FORM. Fortunately, the management team at K-Swiss seems to be saying all the right things about FORM’s continued participation in MMA. I am also intrigued by the possibility of K-Swiss using FORM as an entry point into the sport for the larger K-Swiss brand.

There’s a strong target market fit between K-Swiss and MMA. I also tend to think the brand aligns pretty well with the sport from an image perspecctive; both have that new generation swagger going for them. FORM affords K-Swiss the opportunity to dip its toes in the industry and learn the ins and outs before jumping in with its own, more established brand.