Beach Acquisition Reports Zero Operations, Funds Skechers Buyout with Billions in Debt

TL;DR

**Beach Acquisition is a debt-laden shell company that just swallowed Skechers, so expect major cost-cutting and a bumpy ride for the footwear brand.**

AI Summary

Beach Acquisition Co Parent, LLC, a Delaware corporation formed on April 28, 2025, reported no revenues or net income for the period from its incorporation through June 30, 2025, as it has not commenced operations. The company's financial statements show zero assets and liabilities as of both April 28, 2025, and June 30, 2025. Its primary purpose is to facilitate the acquisition of Skechers U.S.A., Inc., a transaction that closed on September 12, 2025. To fund this merger, Beach Acquisition Co Parent, LLC secured significant debt financing, including a $2.1 billion first lien term loan facility, a $1.6 billion first lien revolving facility, a $1.9 billion senior secured bridge facility, and a $2.5 billion junior debt facility, as detailed in the May 23, 2025 Debt Commitment Letter. Subsequent to the reporting period, on July 14, 2025, the company closed an offering of $1.0 billion in 5.250% Senior Secured Notes due 2032 and $2.2 billion in 10.000%/10.750% Senior PIK Toggle Notes due 2033. On September 12, 2025, the company also entered into a credit agreement for a $3,005.0 million Term Loan Facility and a $1,600.0 million Revolving Credit Facility. Legal proceedings include two appraisal petitions filed in September 2025 by purported Skechers common stock holders, seeking appraisal of their shares. The company believes the $63.00 Cash Election Consideration exceeds the fair value of Skechers Common Stock.

Why It Matters

This filing is crucial for investors as it details the financial structure and significant debt load Beach Acquisition Co Parent, LLC undertook to acquire Skechers U.S.A., Inc. The $3.2 billion in notes and $4.6 billion in senior secured credit facilities highlight a highly leveraged transaction, which could impact Skechers' future financial flexibility and profitability. Employees and customers of Skechers should monitor how this new ownership structure and debt burden might influence operational strategies, product development, and pricing. In the broader market, this acquisition by 3G Capital, known for its aggressive cost-cutting, signals potential competitive shifts in the footwear industry, particularly for rivals like Nike and Adidas, as Skechers navigates its post-merger integration and debt servicing.

Risk Assessment

Risk Level: high — The risk level is high due to the substantial debt financing undertaken for the Skechers acquisition, including $3.2 billion in notes and $4.6 billion in Senior Secured Credit Facilities. The company had no historical operations or assets as of June 30, 2025, meaning all future cash flows will be dedicated to servicing this significant debt, creating considerable financial pressure and operational risk for the newly acquired Skechers.

Analyst Insight

Investors should closely monitor Skechers' post-acquisition financial performance, particularly its ability to generate sufficient cash flow to service the substantial debt. Consider the potential for aggressive cost-cutting measures and their impact on Skechers' brand and market position. This could be a speculative play for those betting on 3G Capital's turnaround expertise, but carries significant downside risk.

Financial Highlights

debt To Equity

N/A

revenue

$0

operating Margin

N/A

total Assets

$0

total Debt

N/A

net Income

$0

eps

$0

gross Margin

N/A

cash Position

$0

revenue Growth

N/A

Key Numbers

• $0 — Revenues and Net Earnings (For the period April 28, 2025, to June 30, 2025, indicating no operations.)
• $2.1B — First Lien Term Loan Facility (Committed debt financing for the acquisition.)
• $1.6B — First Lien Revolving Facility (Committed debt financing for the acquisition.)
• $1.9B — Senior Secured Bridge Facility (Committed debt financing for the acquisition.)
• $2.5B — Junior Debt Facility (Committed debt financing for the acquisition.)
• $1.0B — Senior Secured Notes (Aggregate principal amount of notes issued on July 14, 2025.)
• $2.2B — Senior PIK Toggle Notes (Aggregate principal amount of notes issued on July 14, 2025.)
• $3,005.0M — Term Loan Facility (Aggregate USD equivalent of term loans entered into on September 12, 2025.)
• $1,600.0M — Revolving Credit Facility (First lien cash flow revolving facility entered into on September 12, 2025.)
• $63.00 — Cash Election Consideration per share (Offered to Skechers shareholders in the merger.)

Key Players & Entities

• Beach Acquisition Co Parent, LLC (company) — Registrant and acquiring entity
• Skechers U.S.A., Inc. (company) — Acquired company
• 3G Capital Partners L.P. (company) — Affiliate of investment funds managing the acquiring entity
• JPMorgan Chase Bank, N.A. (company) — Lead left arranger for debt financing
• John Vandemore (person) — Chief Financial Officer of Beach Acquisition Co Parent, LLC
• SEC (regulator) — United States Securities and Exchange Commission
• Giffuni (person) — Petitioner in appraisal lawsuit
• Lancashire Investments L.P. (company) — Petitioner in appraisal lawsuit

FAQ

Risk Factors

• Appraisal Petitions [medium — legal]: Two appraisal petitions were filed in September 2025 by Skechers common stockholders seeking appraisal of their shares. The company believes the $63.00 Cash Election Consideration exceeds the fair value of Skechers Common Stock, suggesting potential disputes over valuation.
• Significant Debt Financing [high — financial]: The acquisition of Skechers was funded by substantial debt, including a $2.1 billion first lien term loan, a $1.6 billion first lien revolving facility, a $1.9 billion senior secured bridge facility, and a $2.5 billion junior debt facility. Subsequent offerings included $1.0 billion in Senior Secured Notes and $2.2 billion in Senior PIK Toggle Notes. The company entered into a $3,005.0 million Term Loan Facility and a $1,600.0 million Revolving Credit Facility on September 12, 2025. This high leverage exposes the company to significant interest rate risk and default risk.
• No Prior Operations [medium — operational]: Beach Acquisition Co Parent, LLC was formed on April 28, 2025, and has not commenced operations as of June 30, 2025. All financial statements show zero assets and liabilities, indicating a shell company established solely for the acquisition. This lack of operational history presents integration risks post-acquisition.

Industry Context

Beach Acquisition Co Parent, LLC's formation and acquisition activity are within the apparel and footwear retail sector, which is characterized by intense competition, evolving consumer preferences, and significant reliance on supply chain management. The sector has seen a trend towards direct-to-consumer sales and digital transformation, alongside ongoing consolidation driven by private equity interest seeking to leverage debt for acquisitions.

Regulatory Implications

The company's operations are subject to general corporate and securities laws. The significant debt financing and the acquisition itself may attract scrutiny from regulatory bodies concerning market concentration or financial stability. The appraisal petitions filed by Skechers shareholders also highlight potential legal and regulatory compliance issues related to shareholder rights and fair valuation.

What Investors Should Do

1. Monitor debt servicing capabilities
2. Assess integration success post-acquisition
3. Evaluate legal proceedings related to appraisal rights

Key Dates

• 2025-04-28: Incorporation of Beach Acquisition Co Parent, LLC — Marks the formation of the entity specifically created to facilitate the acquisition.
• 2025-05-04: Merger Agreement Signed — Formalized the terms and conditions for the acquisition of Skechers U.S.A., Inc.
• 2025-05-23: Debt Commitment Letter Issued — Outlined the significant debt financing secured for the merger, totaling billions of dollars.
• 2025-07-14: Senior Secured Notes and Senior PIK Toggle Notes Offering Closed — Raised $1.0 billion and $2.2 billion respectively, further funding the acquisition through debt issuance.
• 2025-09-12: Merger with Skechers U.S.A., Inc. Closed — The primary purpose of Beach Acquisition Co Parent, LLC was achieved; Skechers became an indirect subsidiary.
• 2025-09-12: Credit Agreement for Term Loan and Revolving Facility Entered — Formalized a $3,005.0 million Term Loan Facility and a $1,600.0 million Revolving Credit Facility post-merger.

Glossary

Merger Consideration

The total value and form of payment (cash or cash and units) offered to Skechers shareholders for their shares in the acquisition. (Defines the terms of the acquisition for Skechers shareholders, including the $63.00 Cash Election Consideration.)

Cash Election Consideration

The specific amount of cash, $63.00 per share, offered to Skechers shareholders who elect to receive only cash for their shares. (Represents the cash component of the merger consideration and is a key figure in the ongoing appraisal petitions.)

Senior PIK Toggle Notes

A type of debt instrument where interest can be paid either in cash or by issuing more debt (PIK - Payment-In-Kind), offering flexibility to the issuer. (Represents a significant portion ($2.2 billion) of the debt financing for the acquisition, indicating a potentially higher cost of capital or cash flow management strategy.)

Appraisal Petitions

Legal actions filed by dissenting shareholders who disagree with the merger consideration and seek a judicial determination of the fair value of their shares. (Indicates potential legal challenges and financial uncertainty related to the acquisition valuation.)

First Lien Term Loan Facility

A type of secured debt that has priority over other debt in the event of default or bankruptcy, used here for acquisition financing. (Represents a substantial portion ($2.1 billion) of the acquisition financing, highlighting the company's significant leverage.)

Revolving Credit Facility

A flexible loan that allows a company to borrow, repay, and re-borrow funds up to a certain limit, often used for working capital or general corporate purposes. (Provides liquidity for the company, with a $1.6 billion first lien facility and a $1,600.0 million facility entered into post-merger.)

Year-Over-Year Comparison

As this is the initial 10-Q filing for Beach Acquisition Co Parent, LLC, there is no prior period filing to compare against. The company was incorporated on April 28, 2025, and as of June 30, 2025, it had no revenues, net income, assets, or liabilities, reflecting its status as a pre-operational entity established solely for the acquisition of Skechers U.S.A., Inc.

Key Financial Figures

• $0.001 — s A common stock of Skechers, par value $0.001 per share (the "Class A Common Stock"),
• $63 — d below: (a)an amount in cash equal to $63.00, without interest thereon, pursuant
• $57.00 — on"); or (b)an amount in cash equal to $57.00 and one unlisted limited liability comp
• $100 — any issued 100% of its Common Units for $100.00, recorded as a members units receiva

Filing Documents

• tmb-20250630x10q.htm (10-Q) — 224KB
• tmb-20250630xex31d1.htm (EX-31.1) — 9KB
• tmb-20250630xex31d2.htm (EX-31.2) — 9KB
• tmb-20250630xex32d1.htm (EX-32.1) — 6KB
• 0001104659-25-091659.txt ( ) — 1066KB
• tmb-20250630.xsd (EX-101.SCH) — 14KB
• tmb-20250630_cal.xml (EX-101.CAL) — 3KB
• tmb-20250630_def.xml (EX-101.DEF) — 31KB
• tmb-20250630_lab.xml (EX-101.LAB) — 87KB
• tmb-20250630_pre.xml (EX-101.PRE) — 58KB
• tmb-20250630x10q_htm.xml (XML) — 47KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION 3

Financial Statements

Item 1. Financial Statements 3 Consolidated Statement of Earnings for the period from April 28, 2025 (Date of Incorporation) to June 30, 2025 3 Consolidated Statement of Comprehensive Income for the period from April 28, 2025 (Date of Incorporation) to June 30, 2025 4 Consolidated Balance Sheets at April 28, 2025 (Date of Incorporation) and June 30, 2025 5 Consolidated Statement of Cash Flows for the period from April 28, 2025 (Date of Incorporation) to June 30, 2025 6 Consolidated Statement of Members' Equity for the period from April 28, 2025 (Date of Incorporation) to June 30, 2025 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8

Management's Discussion and Analysis of Results of Operations and Financial Condition

Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition. 10

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk. 11

Controls and Procedures

Item 4. Controls and Procedures. 11

– OTHER INFORMATION

PART II – OTHER INFORMATION 11

Legal Proceedings

Item 1. Legal Proceedings. 11

Risk Factors

Item 1A. Risk Factors. 11

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 11

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities. 11

Mine Safety Disclosures

Item 4. Mine Safety Disclosures. 11

Other Information

Item 5. Other Information. 12

Exhibits

Item 6. Exhibits. 13 1 Table of Contents EXPLANATORY NOTE Beach Acquisition Co Parent, LLC (the "Company" or "Parent"), a Delaware Corporation, was formed on April 28, 2025 for purposes of consummating the transactions described herein, and is a wholly-owned, direct subsidiary of 3G Fund VI, L.P., a Cayman Islands exempted limited partnership ("Fund VI"), which is an affiliate of investment funds managed by 3G Capital Partners L.P. ("3G Capital"). On August 5, 2025, the United States Securities and Exchange Commission (the "SEC") declared effective the Registration Statement on Form S-4, as amended (File No. 333-287891) (the "Registration Statement"), of the Company, to register its common limited liability company units that will be issued in connection with the transactions described herein. The Company has not commenced operations, has no assets or liabilities, and has not engaged in any significant activities other than those related to its formation from its incorporation on April 28, 2025 through June 30, 2025. 2 Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. BEACH ACQUISITION CO PARENT, LLC CONSOLIDATED STATEMENT OF EARNINGS ( dollars in actuals) Period from April 28, 2025 to June 30, 2025 Revenues $ — Operating expenses — Other items — Earnings before income taxes — Provision for income taxes — Net earnings — Net earnings per common unit – basic and diluted $ — Weighted average number of common units outstanding – basic and diluted 100 See accompanying notes to consolidated financial statements. 3 Table of Contents BEACH ACQUISITION CO PARENT, LLC CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (dollars in actuals) Period from April 28, 2025 to June 30, 2025 Net earnings $ — Other comprehensive income before taxes — Provision for income taxes — Comprehensive income $ — See accompanying notes to consolidated financial statements. 4 Table of Contents BEACH ACQUISITION CO PARENT, LLC CONSOLIDATED BALANCE SHEETS (dollars in actuals) As of As of April 28, 2025 June 30, 2025 ASSETS $ — $ — Current assets — — Other assets — — Total Assets — — LIABILITIES AND EQUITY Current liabilities — — Other liabilities — — Commitments and contingencies – see Note 4 — — Members' Equity Members' unit capital — 100 Members' unit receivable — ( 100 ) Total Liabilities and Members' Equity $ — $ — See accompanying notes to consolidated financial statements. 5 Table of Contents BEACH ACQUISITION CO PARENT, LLC CONSOLIDATED STATEMENT OF CASH FLOWS ( dollars in actuals) Period from April 28, 2025 to June 30, 2025 Operating Activities Net earnings $ — Adjustments to reconcile net earnings to net cash flow provided by operating activities: — Change in assets and liabilities — Net cash flow provided by operating activities — Investing Activities Net cash flow provided by investing activities — Financing Activities Net cash flow provided by financing activities — Net increa

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1: Nature of Business and Basis of Presentation Nature of Business Beach Acquisition Co Parent, LLC (the "Company" or "Parent"), was incorporated in Delaware on April 28, 2025. Parent is a direct, wholly-owned subsidiary of 3G Fund VI, L.P., a Cayman Islands exempted limited partnership ("Fund VI"), which is an affiliate of investment funds managed by 3G Capital Partners L.P. ("3G Capital"). Parent's wholly-owned subsidiaries include Beach Acquisition Holdco, LLC, Beach Acquisition Midco, LLC, Beach Acquisition Bidco, LLC, each being a Delaware limited liability company, and Beach Acquisition Merger Sub, Inc., a Delaware corporation (collectively, the "Subsidiaries"). Parent and Subsidiaries were formed solely for the purpose of effecting the proposed merger by and among Skechers U.S.A., Inc., a Delaware corporation ("Skechers"), Parent and Beach Acquisition Merger Sub, Inc. ("Merger Sub", and together with Parent, the "Buyer Parties"). Subject to the terms and conditions of the Agreement and Plan of Merger dated May 4, 2025 (as may be amended from time to time, the "Merger Agreement"), Merger Sub will merge with and into Skechers, with Skechers continuing as the surviving corporation (the "Surviving Corporation") and becoming a subsidiary of Parent (the "Merger"). The Merger Agreement and the transactions contemplated thereby, including the Merger, are referred to collectively herein as the "Transaction". Parent has not conducted any business operations other than such operations that are incidental to its formation and in connection with the Merger and the issuance of common limited liability company units of Parent ("Common Units") as part of the Merger consideration. Basis of Presentation The consolidated balance sheets are presented in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). Note 2: Summary of Significant Accounting Policies — Use of Estimates The prep

Management's Discussion and Analysis of Results of Operations and Financial Condition

Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition. Management's discussion and analysis of the results of operations and financial condition of Beach Acquisition Co Parent, LLC should be read in conjunction with our consolidated financial statements and their related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated balance sheets as of April 28, 2025 and June 3, 2025 and their related notes that were included in our Registration Statement. References in this document to "Parent", the "Company", "we", "us" and "our" refer to Beach Acquisition Co Parent, LLC. Overview The Company was formed on April 28, 2025, solely for the purpose of effecting the Transaction, as described in the Notes above, including the issuance of Common Units for the Mixed Election Consideration. The Company has not conducted any business operations other than such operations that are incidental to its formation and in connection with the Transaction. Merger Agreement On September 12, 2025, pursuant to the Merger Agreement, Merger Sub merged with and into Skechers, with Skechers continuing as the surviving corporation and an indirect subsidiary of the Company. On the terms and subject to the conditions set forth in the Merger (the "Effective Time"), each share of Class A common stock of Skechers, par value $0.001 per share (the "Class A Common Stock"), and Class B common stock of Skechers, par value $0.001 per share (the "Class B Common Stock" and together with the Class A Common Stock, the "Skechers Common Stock") that was outstanding as of immediately prior to the Effective Time (other than any share of Skechers Common Stock that was (i) (A) held by Skechers and its subsidiaries; (B) owned by the Buyer Parties; or (C) owned by any direct or indirect subsidiary of the Buyer Parties as of immediately prior to the Effective Time or (ii) held by any stockholder who neither voted in favor of the Transact

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk. Market risk is a broad term for the risk of economic loss due to adverse changes in the fair value of a financial instrument. These changes may be the result of various factors, including interest rates, foreign exchange rates and commodity prices. The Company has not conducted any operations during the period from April 28, 2025 to June 30, 2025.

Control and Procedures

Item 4. Control and Procedures. Our principal executive officer and principal financial officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) were effective, based on the evaluation of these controls and procedures required by Rule 13a-15(b) or 15d-15(b) of the Exchange Act. No change in our internal control over financial reporting occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

– OTHER INFORMATION

PART II – OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings. On September 16, 2025, a purported holder of Skechers Common Stock filed a petition for appraisal of stock in the Court of Chancery of the State of Delaware, captioned Giffuni v. Skechers U.S.A., Inc. C.A. No. 2025-1044-KSJM (Del. Ch.). On September 18, 2025, a purported holder of Skechers Common Stock filed a petition for appraisal of stock in the Court of Chancery of the State of Delaware, captioned Lancashire Investments L.P. v. Skechers U.S.A., Inc. C.A. No. 2025-1053 (Del. Ch.). Petitioners seek appraisal of their shares of Skechers Common Stock that they purported to own as of the date the Merger closed. Other appraisal petitions may be filed in the future. Skechers and the Company believe the Cash Election Consideration exceeds the fair value of Skechers Common Stock as of the date the Merger closed.

Risk Factors

Item 1A. Risk Factors. During the period covered by this report, the Company did not conduct any significant activities other than those related to its formation and the matters contemplated by the Transactions. See "Cautionary Statement Regarding Forward-Looking Statements" and "Risk Factors" in the Registration Statement.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. None.

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities. None.

Mine Safety Disclosures

Item 4. Mine Safety Disclosures. Not applicable. 11 Table of Contents

Other Information

Item 5. Other Information. N o n e . 12 Table of Contents

Exhibits

Item 6. Exhibits. 2.1 Agreement and Plan of Merger, dated as of May 4, 2025, by and among Beach Acquisition Co Parent, LLC, Beach Acquisition Merger Sub, Inc. and Skechers U.S.A., Inc. 3.1 Amended and Restated Limited Liability Company Agreement of Beach Acquisition Co Parent, LLC. 31.1 Certification by the Chief Principal Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32* Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101.INS** XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH** Inline XBRL Taxonomy Extension Schema. 101.CAL** Inline XBRL Taxonomy Extension Calculation Linkbase. 101.LAB** Inline XBRL Taxonomy Extension Label Linkbase. 101.PRE** Inline XBRL Taxonomy Extension Presentation Linkbase. 101.DEF** Inline XBRL Taxonomy Extension Definition Document. 104 Cover Page Interactive Data File--the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. Filed or furnished herewith * The certification furnished in Exhibit 32 hereto is deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the Registrant specifically incorporates it by reference. Such certification will not be deemed to be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Registrant specifically incorporates it by reference. ** Submitted electronically herewith 13 Table of Contents

SIGNATURES

SIGNATURES Under the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed by the undersigned thereunto duly authorized. BEACH ACQUISITION CO PARENT, LLC Dated: September 19, 2025 /s/ John Vandemore Name: John Vandemore Title: Chief Financial Officer (Principal Financial Officer and Duly Authorized Signatory) 14

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