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It was one of those stories the came in the back door. Someone in our office called a cousin at who works at Billabong on the afternoon of December 21 to get the t-shirt size of the neice or nephew (you know, to send them a Transworld shirt).

The cousin answered the phone saying, “I bet I know why you’re calling? You just heard that Billabong bought Nixon.”

“No,” the someone said. “But I’ll tell the rest of the office for you.”

Since then the industry has been non-stop buzzing about the stories, the official press release, and more importantly, exactly how much cash money Chad DiNenna and Andy Laats are going to have in their Christmas stockings this year. The bigger, more serious, question: was Nixon, Inc. worth $54.6 million?

The stat that stumped me was that Nixon “will contribute in the range of 5 to 6 per cent of Billabong International’s group sales in the 2006-07 financial year.” If we figure that Billabong had 2005 world-wide sales of approximately US$616 million, and that Nixon will make up 5 to 6 percent of that next year, then they are planning on Nixon doing at least US$31 million in sales in 2006. If that is the case, then $54.6 million may have been a bargain for the Australian surf giant. Andy and Chad are locked in until 2010 for sure as they have a little earn out that could mean either US$18.2 million or 2.25 times earnings before interest, taxes, depreciation and amortization for 2010 whichever is higher.

What saddens some in the brand concious “indy-stry” is that wearing a Nixon watch now means supporting one of the major leaguers. How long will Bob “Hurley” Burnquist and Tony “Quiksilver” Hawk be able to wear Billabong watches? Probably about a long as Andy Irons got to wear wear DC Shoes after they became another piece of Quiksilver’s brand quiver. In addition, so many of the industry faithful don’t like their labels to clash. Some have mentioned that this will play quite well into the hands of Vestal who have been making some pretty nice strides recently in the watch department.

It will be interesting to follow the progress of Nixon over the next couple years. Andy and Chad have been able to build their brand as entrepreneurs and now they’re going to have to answer to a publicly traded company. But Billabong has been kind to VZ and Element and hopefully they can do the same for Nixon.