Golden Gate Capital, an
investor in PacSun, and bootmaker Wolverine are working together to
secure Collective against South Korean conglomerate E-Land Group. If
Golden Gate and Wolverine win the auction, they plan to split up the
brands, with Wolverine taking the footwear labels including Airwalk,
Saucony, and Vision, according to an article in the Wall Street Journal. There’s no word on the future of Sims at this point.
According to WSJ; “A deal could be announced within a week, said one person familiar with the matter.”
It looks like you're new here. If you want to get involved, click one of these buttons!
Comments
Collective Brands Inc.,
which owns Payless ShoeSource as well as multiple iconic shoe brands,
will be split in two by multiple buyers in a purchase valued at $2
billion. Wolverine Worldwide, Blum Capital and Golden Gate Capital
formed an acquisition company to buy Collective for $21.75 a share, in a
deal that is predicted to close early in Q4. The price represents a
104% premium on Collective’s 30-day average stock price before the
company’s announcement that it was looking into a strategic and
financial shift for its operations on August 24, 2011.
In
February, the company said it suffered a net loss of $154.1 million for
the full fiscal year, after shutting the doors of 352 Payless and Stride
Rite stores.
Blum and Golden Gate will get Payless and Collective
Licensing International, which includes more than 4,300 Payless stores
globally, and brought in $2.4 billion in revenue last year.
Wolverine
Worldwide will end up with Collective’s Performance + Lifestyle Group,
which includes brands like Sims, Vision Street Wear and Airwalk. The
transaction is expected to have minimal net impact on Wolverine’s 2012
results, but is expected to generate earnings per share accretion in the
ranges of $0.25 to $0.40 in 2013 and $0.50 to $0.70 in fiscal 2014.
“This
significant acquisition is an incredibly positive statement about the
strength of our Company, our proven business model and confidence in our
ability to grow both existing and newly acquired brands around the
world,” said Don Grimes, Senior Vice President and Chief Financial
Officer. “This transaction, because of both the significant
opportunities for future growth and the historically low interest rate
environment, promises to deliver meaningful earnings accretion and
generate a very attractive return for Wolverine shareholders. Our
historically strong cash flow, combined with the incremental
profitability and cash flow of the newly acquired brands, will give us
the ability to aggressively reduce debt over the next few fiscal years.”
For Wolverine’s full press release on its acquisition, click here.
they are carrying a lot of debt though