Rip Curl has received several approaches from potential bidders, becoming the latest Australian surfwear brand to become a takeover target following two private-equity offers for rival Billabong International.
Rip Curl has been approached by private equity and trade buyers particularly interested in the closely held company's growth potential in emerging markets, such as Asia and South America.
An outright sale could value the business at $500 million, a person familiar with the matter said.
Rip Curl was founded in 1969 by surf-mad friends Doug "Claw" Warbrick and Brian "Sing Ding" Singer who like many locals close to Bell's Beach in Victoria, were producing surfboards out of garages and tool sheds.
The Torquay-based partners pooled their funds to buy a pre-World War II sewing machine which would piece together their first wetsuits.
Since then, Rip Curl has expanded its footprint in Australia and worldwide, with offices in countries such as the US, France, South Africa, and Brazil.
Australia's first professional surfing competition, The Rip Curl Pro, was first held in 1973 and still attracts the world's best as one of 10 legs of the Association of Surfing Professionals World Championship Tour.
In a statement, Rip Curl said it had appointed Bank of America Merrill Lynch to weigh the offers and it may introduce a new investor.
"The board recognises that if any such investment were to occur, it would need to be consistent with our objectives of ensuring our company values and brand values are respected, supporting our staff and being in the interests of our shareholders," Rip Curl said.
Rip Curl's forecast earnings before interest, tax, depreciation and amortszation (EBITDA), in the 2013 fiscal year is $48 million, the person said.
Recent single-brand transactions, including Billabong's
stake sale of Nixon to Trilantic Capital Partners, VF Corp's acquisition of Timberland and PPR's acquisition of Volcom Inc have been completed at price-to-earnings multiples between 9.2 times and 15.8 times.
A direct competitor of Rip Curl, Billabong has received competing $694.5 million proposals from global private equity firms TPG Inc and Bain Capital.
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