Vans, The North Face, and (oh, yeah) Reef parent company VF Corp announced today (June 13, 2011) that they are paying Timberland investors $43 a share for their stock in a buyout valued at approximately $2 billion.
“The Timberland(R) brand is synonymous with high quality outdoor footwear and apparel,” said Eric Wiseman, Chairman and Chief Executive Officer of VF Corporation. “We believe the unique rugged outdoor positioning of the Timberland(R) brand will perfectly complement the premium, technical positioning of The North Face(R) brand, while the Smartwool(R) brand will provide us with a leadership position in a new category. This acquisition will continue the transformation of VF’s portfolio, propelling VF’s Outdoor & Action Sports businesses to 50% of total revenues.”
VF plans to increase Timberland’s sales by 10 percent bringing it close to $1.8 billion in 2011. And that’s how you add nearly $2 billion to annual sales. Follow the jump for the rest.
VF to Acquire The Timberland Company for $43 Per Share
Transformative Acquisition Will Create $10B Global Apparel & Footwear Powerhouse
Addition of Timberland(R) and Smartwool(R) Brands Will Boost VF’s Outdoor & Action Sports Business to 50% of Total Revenues
Will Provide Significant EPS Accretion in 2011 and 2012
Companies to hold webcast/conference call at 8:30 a.m. today; details at end of release
GREENSBORO, N.C. & STRATHAM, N.H., Jun 13, 2011 (BUSINESS WIRE) —
VF Corporation (NYSE: VFC), a leader in branded lifestyle apparel, and The Timberland Company (“Timberland”)(NYSE: TBL) today jointly announced that they have signed a definitive merger agreement. VF will pay Timberland shareholders $43 per share, representing a total enterprise value of approximately $2 billion net of cash acquired. The merger agreement was unanimously approved by both companies’ Boards of Directors.
Timberland is a global footwear and apparel company with expected 2011 revenues of $1.6 billion, over half of which are generated internationally.
“The Timberland(R) brand is synonymous with high quality outdoor footwear and apparel,” said Eric Wiseman, Chairman and Chief Executive Officer of VF Corporation. “We believe the unique rugged outdoor positioning of the Timberland(R) brand will perfectly complement the premium, technical positioning of The North Face(R) brand, while the Smartwool(R) brand will provide us with a leadership position in a new category. This acquisition will continue the transformation of VF’s portfolio, propelling VF’s Outdoor & Action Sports businesses to 50% of total revenues.” He continued, “This will be a winning combination, leveraging VF’s international and direct-to-consumer platforms to drive growth in the Timberland(R) and Smartwool(R) brands globally. At the same time, VF will benefit from Timberland’s rugged outdoor footwear expertise, international penetration in markets such as Japan, and leadership position in sustainability.”
“Timberland is proud of its rich heritage, its track record of success and its reputation as a responsible and environmentally-conscious global citizen, all of which will be preserved and enhanced by becoming part of the VF family of brands,” said Jeffrey Swartz, President and Chief Executive Officer of Timberland. “VF is known for its ability to acquire and grow authentic outdoor brands, while protecting a brand’s unique culture and DNA.”
VF is confident in its ability to maintain Timberland’s momentum by adding Timberland’s strong brands to its powerful portfolio of outdoor and action sports brands, which include The North Face(R), Vans(R), JanSport(R), Reef(R), lucy(R), Eastpak(R), Napapijri(R) and Eagle Creek(R).
VF is targeting 10% annual revenue growth for Timberland through:
Leveraging VF’s established international platforms in Europe, Asia and Latin America
Leveraging VF’s direct-to-consumer platform, consisting of a global base of retail stores and rapidly growing e-commerce business
Enhancing the Timberland(R) and Smartwool(R) brands’ apparel offerings
Aggressively growing the women’s footwear and apparel business
In addition, VF believes it can substantially increase Timberland’s profitability through:
Expense management to improve SG&A ratios;
Supply chain capabilities to reduce sourcing costs;
Operating disciplines of VF’s highly profitable international and direct-to-consumer businesses.
“We look forward to working with Jeff and Timberland’s strong team of leaders as we build our plans for the future together,” concluded Mr. Wiseman.
The acquisition, which is expected to close in the third quarter, should add approximately $700 million to VF’s 2011 revenues. It is also expected to be accretive to VF’s earnings per share, by $.25 in 2011 and by $.75 in 2012, inclusive of deal costs and other acquisition related expenses in both periods. Excluding these expenses, EPS accretion would be approximately $.45 in 2011 and $.90 in 2012. Timberland will become part of VF’s Outdoor & Action Sports coalition and will remain headquartered in Stratham, New Hampshire.
The transaction is subject to customary conditions, including receipt of Timberland stockholder approval and applicable regulatory approvals. VF plans to finance the transaction through a combination of cash on hand, commercial paper and term debt. Stockholders affiliated with the Swartz family have agreed to act by written consent to approve the transaction on July 26, 2011 if the merger agreement has not been terminated by then. The merger agreement provides Timberland with a customary right, after complying with certain notice and other conditions, to terminate the merger agreement to accept a superior proposal prior to receipt of stockholder approval on July 26, 2011.
Webcast Information
VF and Timberland will host a joint webcast presentation and conference call to discuss the proposed transaction today at 8:30 a.m. ET. Interested parties should call 1-800-967-7135 domestic, or 1-719-457-2631 international, to access the call. The call and presentation will also be available through a live Internet broadcast at www.vfc.com and www.timberland.com. A replay will be available through June 20, 2011 and can be accessed by dialing 1-877-870-5176 domestic, and 1-858-384-5517 international. The pass code is 8966811. A replay also can be accessed at both VF’s and Timberland’s web sites.
About VF Corporation
VF Corporation is a global leader in branded lifestyle apparel with more than 30 brands, including Wrangler(R), The North Face(R), Lee(R), Vans(R), Nautica(R), 7 For All Mankind(R), Eagle Creek(R), Eastpak(R), Ella Moss(R), JanSport(R), lucy(R), John Varvatos(R), Kipling(R), Majestic(R), Napapijri(R), Red Kap(R), Reef(R), Riders(R)and Splendid(R). VF Corporation’s press releases, annual report and other information can be accessed through the Company’s home page, www.vfc.com.
About Timberland
Timberland (NYSE: TBL) is a global leader in the design, engineering and marketing of premium-quality footwear, apparel and accessories for consumers who value the outdoors and their time in it. Timberland markets products under the Timberland(R), Timberland PRO(R), Mountain Athletics(R), SmartWool(R), Timberland Boot Company(R) and howies(R) brands, all of which offer quality workmanship and detailing and are built to withstand the elements of nature. The company’s products can be found in leading department and specialty stores as well as Timberland(R) retail stores throughout North America, Europe, Asia, Latin America, South Africa and the Middle East. Timberland’s dedication to making quality products is matched by the company’s commitment to “doing well and doing good” — forging powerful partnerships among employees, consumers and service partners to transform the communities in which they live and work. To learn more about Timberland, please visit www.timberland.com.
