Three times sales?!?! They sold a $43 million company for $120 million cash plus an earn out?!?! Not in the middle of snowboard industry lunacy in the mid 90s did a company go for three times sales. Okay, there are three possibilities. First, the team at Sanuk (here’s the website link) is a bunch of silver tongued negotiating devils. Second, the management team at Deckers went drinking with the management team at Sanuk and the Sanuk team won. I suppose that’s just a variation of the first one.
The real second possibility, then, is that the guys at Deckers are desperate to be cool and didn’t know what they are doing. As you’ll see below where I describe Deckers, that’s unlikely. Decker’s history makes that clear.