North Face-Parent VF to Buy Dickies Owner For $820 Million -- Update

By Cara Lombardo Features Dow Jones Newswires

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.

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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.

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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)