Skydive the Beach to buy Skydive Queenstown for $17M

ASX-listed Skydive the Beach to buy Skydive Queenstown for $17 million

By Suze Metherell

Oct. 12 (BusinessDesk) - Skydive the Beach, the ASX-listed adventure tourism operator, has entered into an agreement to buy Skydive Queenstown, New Zealand's first and largest tandem skydiving company, for $17 million.

The Wollongong-based business is tapping its shareholders for A$19.6 million via a renounceable rights offer, to fund its purchase of Queenstown's sole skydive operator, which trades under the name Nzone, it said in a statement to the ASX. The purchase price represents five times enterprise value of Skydive Queenstown's earnings before interest, tax, depreciation and amortisation and will be "materially earnings accretive from completion".

Founded in 1990, Skydive Queenstown is privately owned by founders Lindsay Williams and Stephen Smith, employs over 70 staff and has chalked up more than 250,000 tandem jumps in its 25-year history. The company controls 33 percent of New Zealand's overall skydiving market, the Australian company said.

Skydive the Beach is looking to tap into New Zealand's booming tourism market, which has grown 8 percent to a record 3.02 million visitors in the year to August. Skydive Queenstown reported a 16 percent increase in annual sales to $10.4 million, while underlying ebitda grew 48 percent to $3.4 million.

The stock last traded at 31.5 Australian cents, before it was placed in a trading halt ahead of its renounceable rights offer. It debuted on the ASX in March via a $25 million initial public offer which it used to buy its main competitor, Australia Skydive.

(BusinessDesk)

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