Branded apparel maker VF Corporation will snap up The Timberland Company in an all-cash deal worth $2 billion, a move that would create a $10 billion apparel and footwear group.
Both companies have presence in India.
“VF will pay Timberland shareholders $43 a share, representing a total enterprise value of about $2 billion net of cash acquired,” the two firms said in a joint statement on Monday. Both firms have entered into a definitive agreement for the proposed deal. Timberland is a global footwear and apparel company with expected 2011 revenues of $1.6 billion.
In India, VF markets well known Wrangler, Lee, Nautica, JanSport and Kipling products through VF Arvind Brands Private Ltd. Timberland has a partnership with Reliance Brands, which is part of Mukesh Ambani-led Reliance Industries. “Transformative acquisition will create $10 billion global apparel and footwear powerhouse,” the statement noted.
VF's Chairman and CEO Eric Wiseman said the buyout would continue the transformation of the firm's portfolio, propelling VF's Outdoor & Action Sports businesses to 50 per cent of total revenues.
New York Stock Exchange-listed VF's portfolio of outdoor and action sports brands include The North Face, Vans, JanSport, Reef(R) and Eastpak.
The transaction, expected to be completed in the third quarter, would add about $700 million to VF's overall revenues in 2011.
Timberland would become part of VF's Outdoor & Action Sports coalition.
VF plans to finance the transaction through a combination of cash on hand, commercial paper and term debt.
Timberland can also terminate the pact with VF, in case it receives a superior offer before July 26.
