Rapala buys into Fishing 13

https://www.globenewswire.com/news-release/2019/07/09/1880298/0/en/RAPALA-VMC-CORPORATION-RAPALA-ACQUIRES-49-OF-DQC-INTERNATIONAL-CORP-OWNER-OF-13-FISHING-ROD-AND-REEL-BRAND-INVESTS-IN-THE-COMPANY-AND-CONCLUDES-A-PERPETUAL-WORLDWIDE-LICENCE-AND-EX.html

This was pretty big news when I heard it yesterday. I am curious how others feel about this.
Rapala is a super strong brand.

Rapala VMC Corporation
Stock Exchange Release
July 9, 2019 at 5:00 p.m.

RAPALA VMC CORPORATION (“RAPALA”) ACQUIRES 49% OF DQC INTERNATIONAL CORP, OWNER OF 13 FISHING ROD AND REEL BRAND, INVESTS IN THE COMPANY AND CONCLUDES A PERPETUAL WORLDWIDE LICENCE AND EXCLUSIVE DISTRIBUTION AGREEMENT EXCLUDING THE USA

Rapala has concluded definitive agreements to acquire in total 49% of the share capital of the Florida-based DQC International Corp (also known as “13 Fishing”) from the majority owner Mr. James Coble and minority shareholders Mr. Phil Feigh Chu and Mr. Yu-Wei Chang. Rapala and remaining 51% shareholder Mr. James Coble have also both agreed to inject more capital into 13 Fishing and Rapala has agreed to lend funds to recapitalize the company. The 10 million US dollar cash injection from Rapala will facilitate 13 Fishing’s growth both in the USA and international markets. As part of the total transaction it has been agreed that James Coble will receive 225.000 shares of Rapala VMC Corporation, which the company has as treasury shares.

DQC International Corp, known especially in the USA for its 13 Fishing -branded rods and reels, is a Clearwater, Florida based company established in 2012 by Mr. James Coble and the two other minority shareholders. The company has grown fast and its gross sales, predominantly from the USA, is ca. 25 million US dollars. The company employs ca. 25 employees, including design and product development teams both in Florida and Taiwan. 13 Fishing has won Best in Category awards at 2017 and 2018 ICAST and is recognized as one of the fastest growing rod and reel brands in US consumer panel studies.

Simultaneously Rapala has concluded a perpetual license agreement with 13 Fishing under which Rapala will secure exclusive distribution rights to 13 Fishing’s products and distribute all 13 Fishing’s existing and new products outside the USA. According to the agreement, Rapala has the perpetual right to use all intellectual property rights of 13 Fishing outside the USA, while DQC International Corp remains the ultimate brand owner.

13 Fishing’s products will be incorporated into Rapala’s global distribution network outside of the USA. In the USA Rapala’s and 13 Fishing’s operations will remain separate and independent and possibilities for mutually beneficial operative synergies will be further evaluated in the future.

13 Fishing’s product portfolio, concepts and R&D capabilities will form the future platform for Rapala Group’s global approach into the rod and reel -category. 13 Fishing’s product development team has already started to work with Rapala’s global network to introduce new innovative products to the global markets. Furthermore, Rapala will make own investments in marketing and product development resources to secure successful introduction of 13 Fishing products to fishermen and retailers outside of the USA.

Subject to fulfilling customary closing conditions, the transactions referred above are expected to close by the end of third quarter 2019.

“Rapala is widely regarded as the largest distribution company in our industry. Where 13 Fishing excel in branding, product development and innovation, they excel in driving operational growth and revenue. Joining forces with a truly global distribution network and leveraging their vast knowledge will allow the team at 13 Fishing to rapidly accelerate the growth. At our core we will remain agile and innovative while seeking to stretch our global brand presence. “says James Coble, President of DQC International Corporation.

“For some time we have been carefully exploring various options for a long lasting solution to enter the worldwide rod and reel business in a financially meaningful way, which leverages our global presence. During the long discussions we have deepened our understanding of 13 Fishing and have become convinced of their capabilities to build a global rod and reel brand in a partnership with us. 13 Fishing already has a proven record of building a dynamic brand and innovative products, resulting in fast sales growth in the USA. 13 Fishing has managed to successfully wedge into the world’s most competitive fishing tackle market in a relatively short time. We are confident that combining our industry knowledge, most global distribution network of the industry and understanding of the various fishing tackle markets with James Coble and his team’s agility, innovativeness and other capabilities, we can grow 13 Fishing into a worldwide rod and reel player. The capital injection to 13 Fishing will accelerate this development both in the USA and outside the USA. We will subsequently benefit of this through our distribution companies outside of the USA and as influential minority shareholder of 13 Fishing. In the USA 13 Fishing will continue to have its own organization and it will be operating independently in co-operation with Rapala USA. I have full confidence in the partnership with James Coble and his team and I welcome them all into the global Rapala family”, says Jussi Ristimäki, President and CEO of Rapala VMC Corporation.

RAPALA VMC CORPORATION

That’s to bad. I havent been a big fan of to many rapala products. And I really like all my 13 gear I have. Hope nothing changes

Not to be cynical but I don’t see this going good for the consumer.

mrpike1973 wrote:

Not to be cynical but I don’t see this going good for the consumer.

I am trying to keep an open mind. I do see both sides consumer and business level. Could be good for the consumers just as well as it could be bad.

Slide over VMC, Sufix, Storm, Blue Fox, Luhr Jensen, Williamson, Dynamite Baits, Mora Ice, StrikeMaster, Marttiini and Peltonen, Rapala is putting another notch into their belt. Hopefully this helps 13 become a better product unlike some of the other Rapala items that has been going down the river.

I’ve enjoyed what Fishing 13 products I have purchased. It will be interesting how their product availability and pricing will shake out along with future innovations. I’m cautiously optimistic

Rapala has a 49 % share. 13 fishing still is it’s own company.

-J.

mrpike1973 wrote:

Not to be cynical but I don’t see this going good for the consumer.

X2, most of these agreements end up with lower product quality and higher prices in the long run.

And to Jon’s point, while they technically are separate for now, since Rapala has exclusive rights to future R&D, I’ll guess the conditions of sale were because of minority ownership and it won’t be long before Rapala buys the remaining 51%.

Jon Jordan wrote:

Rapala has a 49 % share. 13 fishing still is it’s own company.

-J.

Yes I did miss that they do not have the majority. Still pretty interesting.

Jon Jordan wrote:

Rapala has a 49 % share. 13 fishing still is it’s own company.

-J.

Yes but like most shareholders they’ll be demanding every penny 13 can squeeze out of its products. Just look at Marcum since Rapala acquired them, they’re more interested in pumping out new products than fixing issues with the current ones.

munchy wrote:

Yes but like most shareholders they’ll be demanding every penny 13 can squeeze out of its products. Just look at Marcum since Rapala acquired them, they’re more interested in pumping out new products than fixing issues with the current ones.

This is exactly what I am afraid of. It’s too bad, I liked my 13 fishing stuff.

Depends how you look at it.

Current majority owner keeps control of company. Rapala takes over all distribution of product.

Current owner focuses on production and product development.

Rapala focuses on distribution and sales. More sales = more profit.

All stock owners want the production and distribution to be as efficient as possible. Looks like each will focus on what they do best. If each succeeds, both will profit.

-J.

Bye-Bye Okuma…

There are vee few scenarios where any type of merger or corporate buyout are ever truly “good” for the consumer. Competition is the best thing for consumers in any industry.

I do not see a ton of changes coming to the average angler who may purchase a few things here and there. I’d be shocked to see the product quality increase or decrease significantly, rather Rapala likely has means to produce very similar products at a lower price point (but will obviously pocket the difference and maintain prices or even raise them).

I’ve not been a huge fan of either company honestly. So does that mean Rapala is producing all the new lures 13 fishing has at iCast?

Time will tell. I don’t personally own any 13 gear. Main concern to me is when a big company buys a small outfit with a unique offering is when it comes to cost control and they change the product to lower cost and it becomes exactly what they already had versus high quality and unique.

13 was junk to start with, no buyout ever improves quality…

mark-bruzek wrote:

13 was junk to start with, no buyout ever improves quality…

X2

Never heard of 13 fishing…..

mark-bruzek wrote:

13 was junk to start with, no buyout ever improves quality…

They had 2 different things going for them. Quality gear. And cheaper gear. The quality stuff was nice. The cheap line was well cheap. They owned or bought all the number 8 brand. Candy app stuff. Was all lower end. But they had alot of nice ice gear.

mark-bruzek wrote:

13 was junk to start with

I have not held one but I hope the 13 fishing Archangle rod is not junk at $700. They have some stuff that was good but other stuff that is junk. Like any company, not all of their products are winners.