Branded apparel company VF Corp. (VFC) agreed to buy Timberland
Co. (TBL) for about $2 billion, taking advantage of the footwear
company's beaten-down stock price to boost its outdoor and action
sports businesses.
VF's offer of $43 a share represents a premium of 43% to
Friday's close. Shares of Timberland, which specializes in boots
and outdoor apparel, traded above $45 as recently as late April,
but a first-quarter report that fell well short of estimates sent
the stock tumbling. Its earnings in the period fell 30% as it spent
more on planned initiatives and saw higher product costs.
In premarket trading, Timberland surged to $42.76, while VFC was
inactive.
The companies expect to close the deal in the third quarter.
Timberland is expected to add about $700 million to VF's 2011
revenue and boost per-share earnings by 45 cents in 2011 and by 90
cents in 2012, excluding acquisition-related expenses.
"This acquisition will continue the transformation of VF's
portfolio, propelling VF's Outdoor & Action Sports businesses
to 50% of total revenues," said VF Corp. Chairman and Chief
Executive Eric Wiseman.
In late April, VF Corp. saw a 23% rise in first-quarter
earnings, with all segments posting increased sales, led by its
outdoor and action sports products division. Revenue jumped 12% to
$1.96 billion.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283;
melodie.warner@dowjones.com