The founders of STAB Magazine have just got back the business from the administrators of SurfStitch, continuing the unwinding of content businesses bought by the online clothing retailer.
Sam McIntosh and Tom Bird, who founded the magazine for high-performance surfing, closed the deal with administrators John Park, Quentin Olde and Joseph Hansell of FTI Consulting.
The process to sell STAB started several months ago, before the appointment of administrators last month.
Full details of the deal were not announced but the co-founders will pay a “nominal” cash consideration for the STAB business.
In May 2015, the SurfStitch bought Stab Magazine and a surf weather site, Magicseaweed, for a combined $13.8 million cash and 4.8 million shares.
“SurfStitch Group and Rollingyouth Media (STAB) will maintain a close commercial relationship with both parties entering into a three-year agreement for the supply of marketing and content development and advertising services to the SurfStitch Group,” FTI Consulting said.
SurfStitch went into into administration citing significant challenges including two class actions, protracted litigation and an investigation by the corporate regulator ASIC.
The business, started in 2007 by two surfing buddies from Sydney’s northern beaches, Lex Pedersen and Justin Cameron, listed on the ASX in late 2014 at $1.00 per share and hit a high of $2.13 a year later. The shares last traded at 6.8 cents.
SurfStitch had been working to stem losses from the business and was looking at sales of its media assets and the potential to offload other assets.
The company found that the integration of a string of acquired businesses has been slower than anticipated and the benefits lower than expected.
In April, SurfStitch sold action and extreme sport video business Garage Entertainment to the Madman Media Group for a loss. SurfStitch in 2015 paid $15 million in cash and shares for Garage and its assets including the acclaimed Australian documentary Bra Boys.
In December last year, SurfStitch sold its surfboard subsidiary Surf Hardware International at a loss to investment company Gowing Bros Ltd for $17 million. The company company then said the business it bought a year ago for $23.7 million wasn’t a good strategic fit.
Surfstitch’s management was restructured after the surprise departure of CEO and co-founder Justin Cameron in March last year. The company then said it understood Cameron was pursuing a potential acquisition of the business in conjunction with private equity. There has been no news since.