This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (August 15, 2017).
VF Corp., the owner of clothing brands such as the North Face and Timberland, said that it has reached a deal to buy Williamson-Dickie Manufacturing Co. for $820 million in cash, in a deal VF 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 past 12 months, VF said. VF Chief Executive Steve Rendle said the acquisition, expected to close in the fourth quarter, will create a workwear segment 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 Chief Executive Philip Williamson and the company's 7,000 employees are expected to remain with the combined company.
As a result of the Williamson-Dickie 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% so far this year, rose 2% to $62.96 in early afternoon trading on Monday.
(END) Dow Jones Newswires
August 15, 2017 02:48 ET (06:48 GMT)