VF Corporation Approves Separation of Kontoor Brands, Inc.
April 30 2019 - 6:55AM
Business Wire
VF Corporation (NYSE: VFC), a global leader in branded lifestyle
apparel, footwear and accessories, today announced that its Board
of Directors has approved the previously announced separation of
VF’s Jeanswear organization into an independent, publicly traded
company. The new company, named Kontoor Brands, Inc., will include
the Wrangler®, Lee® and Rock &
Republic® brands, and the VF OutletTM business.
The separation will be achieved through the distribution of 100
percent of the shares of Kontoor Brands to holders of VF common
stock. VF shareholders entitled to receive the distribution will
receive a book-entry account statement or a credit to their
brokerage account reflecting their ownership of Kontoor Brands
common stock.
The distribution of Kontoor Brands’ shares is expected to be
completed after the market close on May 22, 2019, with VF
shareholders receiving one share of Kontoor Brands common stock for
every seven shares of VF common stock held at the close of business
on the record date of May 10, 2019. Fractional shares of Kontoor
Brands common stock will not be distributed. Any fractional share
of Kontoor Brands common stock otherwise issuable to a VF
shareholder will be sold in the open market on such shareholder’s
behalf, and such shareholder will receive a cash payment for the
fractional share based on its pro rata portion of the net cash
proceeds from all sales of fractional shares.
Following the distribution of Kontoor Brands’ common stock on
May 22, 2019, Kontoor Brands will be an independent, publicly
traded company. Kontoor Brands has received approval for the
listing of its common stock on the New York Stock Exchange under
the symbol “KTB.”
Prior to the distribution, VF expects to mail an information
statement to all shareholders entitled to receive the distribution
of shares of Kontoor Brands’ common stock. The information
statement will describe Kontoor Brands, including the risks of
owning Kontoor Brands’ common stock and other details regarding the
spin-off.
The completion of the distribution is subject to a number of
customary conditions, including the Securities and Exchange
Commission (SEC) having declared effective Kontoor Brands’
Registration Statement on Form 10, as amended, which Kontoor Brands
has filed with the SEC and is available at the SEC’s website at
http://www.sec.gov.
VF expects to receive an opinion from its tax advisors
confirming the tax-free status of the spin-off to VF and its
stockholders (except to the extent of cash received in lieu of
fractional shares).
VF expects that a “when-issued” public trading market for
Kontoor Brands’ common stock will commence on or about May 9, 2019
under the symbol “KTB WI,” and will continue through the
distribution date. VF also anticipates that “regular-way” trading
of Kontoor Brands’ common stock will begin on May 23, 2019, the
first trading day following the distribution date.
Beginning on or about May 9, 2019, and through the distribution
date, it is expected that there will be two ways to trade VF common
stock – either with or without the distribution of Kontoor Brands’
common stock. VF shareholders who sell their shares of VF common
stock in the “regular-way” market (that is, the normal trading
market on the NYSE under the symbol “VFC”) after the record date
and on or prior to the distribution date will be selling their
right to receive shares of Kontoor common stock in connection with
the spin-off. It is anticipated that shares of VF common stock will
also trade ex-distribution (that is, without the right to receive
the Kontoor Brands distribution) during that period under the
symbol “VFC WI.” Investors are encouraged to consult with their
financial advisors regarding the specific implications of buying or
selling shares of VF common stock on or before the distribution
date.
Barclays acted as financial advisor to VF regarding the
spin-off.
About VF
VF Corporation (NYSE: VFC) outfits consumers around the world
with its diverse portfolio of iconic lifestyle brands, including
Vans®, The North Face®, Timberland®, Wrangler® and Lee®.
Founded in 1899, VF is one of the world’s largest apparel, footwear
and accessories companies with socially and environmentally
responsible operations spanning numerous geographies, product
categories and distribution channels. VF is committed to delivering
innovative products to consumers and creating long-term value for
its customers and shareholders. For more information,
visit www.vfc.com.
About Kontoor Brands
Kontoor Brands, Inc. (NYSE: KTB) will be a global lifestyle
apparel company, with a portfolio led by some of the world’s most
iconic denim brands: Wrangler®, Lee® and Rock &
Republic®. Kontoor Brands designs, manufactures and distributes
superior high-quality products that look good and fit right, giving
people around the world the freedom and confidence to express
themselves. Kontoor Brands is focused on leveraging its global
platform, strategic sourcing model and best-in-class supply chain
to drive brand growth and deliver long-term value for its
stakeholders.
Forward-looking Statements
Certain statements included in this release and attachments are
“forward-looking statements” within the meaning of the federal
securities laws. Forward-looking statements are made based on our
expectations and beliefs concerning future events impacting VF and
Kontoor and therefore involve several risks and uncertainties. You
can identify these statements by the fact that they use words such
as “will,” “anticipate,” “estimate,” “expect,” “should,” and “may”
and other words and terms of similar meaning or use of future
dates. We caution that forward-looking statements are not
guarantees and that actual results could differ materially from
those expressed or implied in the forward-looking statements.
Potential risks and uncertainties that could cause the actual
results of operations or financial condition of VF or Kontoor to
differ materially from those expressed or implied by
forward-looking statements in this release include, but are not
limited to: risks associated with the proposed spin-off of VF’s
Jeanswear business, including the risk that the spin-off will not
be consummated within the anticipated time period or at all; the
risk of disruption to VF’s business in connection with the proposed
spin-off and that VF could lose revenue as a result of such
disruption; the risk that the companies resulting from the spin-off
do not realize all of the expected benefits of the spin-off; the
risk that the spin-off will not be tax-free for U.S. federal income
tax purposes; the risk that there will be a loss of synergies from
separating the businesses that could negatively impact the balance
sheet, profit margins or earnings of both businesses; and the risk
that the combined value of the common stock of the two
publicly-traded companies will not be equal to or greater than the
value of VF common stock had the spin-off not occurred. There are
also risks associated with the relocation of VF’s global
headquarters and a number of brands to the metro Denver area,
including the risk of significant disruption to VF operations, the
temporary diversion of management resources and loss of key
employees who have substantial experience and expertise in VF’s
business, the risk that VF may encounter difficulties retaining
employees who elect to transfer and attracting new talent in the
Denver area to replace our employees who are unwilling to relocate,
the risk that the relocation may involve significant additional
costs to us and that the expected benefits of the move may not be
fully realized. Other risks for both companies include foreign
currency fluctuations; the level of consumer demand for apparel,
footwear and accessories; disruption to distribution systems;
reliance on a small number of large customers; the financial
strength of customers; fluctuations in the price, availability and
quality of raw materials and contracted products; disruption and
volatility in the global capital and credit markets; response to
changing fashion trends, evolving consumer preferences and changing
patterns of consumer behavior, intense competition from online
retailers, manufacturing and product innovation; increasing
pressure on margins; ability to implement their business strategy;
ability to grow their international and direct-to-consumer
businesses; each company and its vendors’ ability to maintain the
strength and security of information technology systems; the risk
that facilities and systems and those of third-party service
providers may be vulnerable to and unable to anticipate or detect
data security breaches and data or financial loss; ability to
properly collect, use, manage and secure consumer and employee
data; stability of manufacturing facilities and foreign suppliers;
continued use by suppliers of ethical business practices; ability
to accurately forecast demand for products; continuity of members
of management; ability to protect trademarks and other intellectual
property rights; possible goodwill and other asset impairment;
maintenance by licensees and distributors of the value of VF’s
brands; ability to execute and integrate acquisitions; changes in
tax laws and liabilities; legal, regulatory, political and economic
risks; the risk of economic uncertainty associated with the pending
exit of the United Kingdom from the European Union (“Brexit”) or
any other similar referendums that may be held; and adverse or
unexpected weather conditions. More information on potential
factors that could affect VF’s financial results is included from
time to time in VF’s public reports filed with the Securities and
Exchange Commission, including VF’s Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q and more information on potential
factors that could affect Kontoor Brands’ financial results is
included in Kontoor Brands’ registration statement on Form 10 filed
with the Securities and Exchange Commission.
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version on businesswire.com: https://www.businesswire.com/news/home/20190430005174/en/
VF CorporationJoe Alkire,
336-424-7711Vice President, Corporate Development, Investor
Relations andFinancial Planning & AnalysisorCraig Hodges,
336-424-5636Vice President, Corporate Affairs
VF (NYSE:VFC)
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