Ocean Pacific Apparel Corp., one of the oldest and best-known surf wear brands in Southern California, said Tuesday it has been acquired by a Bay Area investment firm.
Doyle & Boissiere Fund LLC of San Francisco, a $100-million-plus investment company affiliated with Phoenix-based Finova Group, acquired an 86% stake in the Irvine surf wear maker. Terms weren't disclosed.
Op Chief Executive Richard Baker said Tuesday that the deal "now gives us a proactive investment group whose sole reason is to market Op brands, and that bodes very well for us in 1999."
Doyle purchased the controlling interest from San Francisco-based Berkeley International Capital Corp., which bought into Op in 1993.
"It's a good opportunity for someone to come in and put enough working capital to really grow the business," said John Quarterman, assistant general counsel at Berkeley. "Surf wear is really hot right now, but we weren't really prepared to make that type of investment."
He said Berkeley earned a "nice but not huge" return on its Op investment, but he declined to disclose the amount.
Baker, who bought a small stake in Op as part of the deal, said the new owners plan no changes in management. Neither William Doyle nor Lionel Boissiere, who were returning to California from New York on Tuesday, could be reached for comment. Their fund invests in underperforming mid-sized companies.
For Baker, the deal ends a yearlong search for the right partner to help him reinvent the apparel maker.
In June, Baker announced that Montreux Equity, a San Francisco venture capital firm, was on the verge of buying Op. But as the discussions bogged down over price, other investors came calling. "The success of our business at trade shows this summer prompted a lot of interest," Baker said Tuesday.
The 51-year-old Baker, a former president of women's wear at Tommy Hilfiger and Esprit, joined Op in February 1997. He has upgraded and added licensees, hired designers and developed a promotional campaign to reposition the once-mighty company, whose brand generates about $130 million in sales worldwide.
Baker wants to recapture not only Op's place in the surf market but also a profitable and influential stake in the active wear market.
This summer, Op launched a division called Op Sport, featuring a line of men's and unisex active apparel produced and distributed by Virginia-based Tultex. The new division signals the future of Op, which Baker believes is tied to the increasingly popular world of individual outdoor sports, such as surfing, skateboarding and snowboarding.
The buyout also enables Baker to initiate the second part of his strategy: turning Op into a holding company that beginning next year will buy and manage other apparel brands.
The acquisition of Op marks the first foray into fashion for Doyle & Boissiere. The firm is credited with the corporate revivals of Granny Goose Foods Inc. in Oakland, the largest snack food producer based in California; and Naturade Inc. of Paramount, a maker of herbal medicines and nutritional supplements.
The Doyle fund was formed in January 1997 with major backing from the giant California Public Employees Retirement System, or CalPERS.
Op was founded in 1972 by surfboard maker Jim Jenks, who, along with San Diego-based Hang Ten, was among the first to take Southern California's surf look nationwide. At its peak, Op's sales from worldwide licensing operations topped $400 million.
By the early 1990s, the company fell on hard times under the pressure of rising debts, competition from street-oriented fashions and an attempt to shed its manufacturing operations to focus solely on licensing.
Op filed for Chapter 11 bankruptcy reorganization in May 1992. Berkeley acquired Op's assets a year later.