North Face-Parent VF to Buy Dickies Owner For $820 Million -- Update
August 14 2017 - 12:38PM
Dow Jones News
By Cara Lombardo
VF Corp., the owner of clothing brands such as The North Face
and Timberland, said Monday it has reached a deal to buy
Williamson-Dickie Manufacturing Co. for $820 million in cash, in a
deal it says will double its presence in the workwear-apparel
market.
Williamson-Dickie, a private company best-known for Dickies
scrubs and Walls outdoor coveralls, generated $875 million in
revenue in the last 12 months. VF Chief Executive Steve Rendle said
the acquisition, expected to close in the fourth quarter, will
create a company with about $1.7 billion in annual revenue.
VF, whose apparel and accessories offerings range from Nautica
sportswear to SmartWool socks, has been tweaking its portfolio in
recent months, shedding a group of luxury brands and a licensed
sportswear company.
Chief Financial Officer Scott Roe said on a conference call
Monday to expect more changes to the company's portfolio.
"We're not finished," he said. "Stay tuned."
Analysts expect continued momentum in career apparel, which VF
estimates to be a $30 billion a year industry, as the U.S. job
market expands. Williamson-Dickie's large peers in the industry
include Carhartt brand parent Carhartt Inc. and Duluth Trading
parent Duluth Holdings Inc.
VF said buying Williamson-Dickie will especially increase its
sales for health-care and service apparel. Williamson-Dickie also
operates manufacturing plants in Mexico and Honduras.
Williamson-Dickie has 400 retail stores and a presence in more
than 100 countries, though 66% of its sales are in the U.S.
Williamson-Dickie's Chief Executive Philip Williamson and its 7,000
employees are expected to remain with the combined company.
As a result of the Williamson-Dickie's deal, VF raised its
forecast on annual revenue by $200 million to $11.85 billion and
lifted its adjusted earnings guidance by 2 cents to $2.96 a
share.
VF shares, up 18% this year, are up 2% to $62.83 in Monday
trading. The stock is up 17.7% so far this year.
Write to Cara Lombardo at cara.lombardo@wsj.com
(END) Dow Jones Newswires
August 14, 2017 12:23 ET (16:23 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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