VF Corporation, the apparel business best known for its Wrangler brand, is to acquire The Timberland Company to create a $10 billion global apparel and footwear powerhouse.
The two companies signed a definitive merger agreement today under which VF will pay Timberland shareholders $43 per share, representing a total enterprise value of approximately $2 billion. The merger agreement was unanimously approved by both companies' boards of directors.
VF already owns 30 brands including The North Face, Vans, JanSport, Reef, lucy, Eastpak, Napapijri and Eagle Creek. The acquisition will add Timberland, SmartWool, Timberland PRO, Mountain Athletics, and Timberland Boot Company to its portfolio.
Timberland, best known for its rugged outdoor footwear, has expected 2011 revenues of $1.6 billion, over half of which are generated internationally.
"The Timberland 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 brand will perfectly complement the premium, technical positioning of The North Face brand, while the SmartWoolbrand 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 percent 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 and SmartWool brands globally.”
"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."
The transaction is subject to customary conditions, including receipt of Timberland stockholder approval and applicable regulatory approvals. If all goes according to plan, Timberland will become part of VF's Outdoor & Action Sports coalition and will remain headquartered in Stratham, New Hampshire. The acquisition is expected to close in the third quarter.
