DA Davidson Downgrades Volcom (VLCM) to Neutral; PPR Makes $24.50 a Share Offer

DA Davidson downgraded Volcom (NASDAQ: VLCM) to Neutral.

DA analyst says, "This morning, the French conglomerate PPR (owner of
Gucci and 72% of Puma) and VLCM announced a definitive merger agreement for PPR to make a cash tender offer to acquire 100% of VLCM’s shares for $24.50 a share...We believe the offer price of $24.50, which represents a P/E multiple of 18.1x and an EV/EBITDA multiple of 9.6x our 2012 estimates, is a fair valuation for a premiere actionsports brand such as Volcom. Given the existing offer’s valuation (which would require a competing bidder to pay greater than 10x EV/EBITDA) we do not anticipate a competing bid and expect the deal will close in the 3Q11."

"Offer highlights the attractiveness of authentic actionsports and outdoor
sports brands...Companies we cover which we believe have such brands include V.F. Corporation (NYSE: VFC)(BUY)) (Vans, The North Face), Black Diamond Inc. (NYSE: BDE)(BUY) (Black Diamond, Gregory) and Quiksilver, Inc. (NYSE: ZQK)(NEUTRAL) (Quiksilver, DC Shoe, Roxy)."

For more ratings news on Volcom click here and for the rating history of Volcom click here.

Shares of Volcom closed at $24.40 yesterday.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Canaccord Genuity Downgrades Antofagasta Plc. (ANTO:LN) (ANFGF) to Hold
• JPMorgan Downgrades AssetMark Financial Holdings Inc. (AMK) to Neutral
• Goldman Sachs Downgrades Parade Technologies Ltd. (4966:TT) to Sell