乱伦巴士 Announces Definitive Agreement to Acquire Williamson-Dickie Mfg. Co.; Raises 2017 Outlook and 2021 Financial Targets

乱伦巴士

  • Acquisition creates a global leader in workwear;
  • 2021* revenue and earnings per share (EPS) now expected to exceed $15 billion and $5.00, respectively;
  • Williamson-Dickie expected to add more than $1 billion of revenue by 2021*;
  • Acquisition provides immediate accretion to EPS* and free cash flow in 2017; and,
  • Acquisition is consistent with 乱伦巴士鈥檚 commitment to active portfolio management and expanding its growing Workwear platform.

    * Excludes transaction and deal-related expenses; 2021 references in this release are based on 乱伦巴士鈥檚 new fiscal year end.

GREENSBORO, N.C.--(BUSINESS WIRE)-- 乱伦巴士 Corporation (NYSE: 乱伦巴士C), a global leader in branded lifestyle apparel, footwear and accessories, and Williamson-Dickie Mfg. Co., a family-owned, private global workwear company, today jointly announced that they have signed a definitive merger agreement.

The transaction is expected to be completed early in the fourth quarter of this year and 乱伦巴士 will pay Williamson-Dickie shareholders approximately $820 million in cash. On a trailing 12-month basis, Williamson-Dickie generated approximately $875 million of revenue. Additional details regarding the transaction and the strategic rationale supporting it will be reviewed during a 乱伦巴士 conference call held at 8:30 a.m. Eastern Time today. The conference call will be broadcast live via the internet, accessible at . An investor presentation is also available for download at the same location.

Well-known Williamson-Dickie brands include: Dickies庐, Workrite庐, Kodiak庐, Terra庐, and Walls庐. These brands will join 乱伦巴士鈥檚 current workwear offerings including: Wrangler庐 RIGGS Workwear庐, Timberland PRO庐, Red Kap庐, Bulwark庐, and Horace Small庐. Upon closing, Williamson-Dickie will become part of 乱伦巴士鈥檚 Imagewear coalition. Philip Williamson, Chief Executive Officer of Williamson-Dickie will remain with the company, headquartered in Fort Worth, Texas.

鈥淲hen we introduced our 2021 global business strategy earlier this year, reshaping our portfolio to accelerate growth was our highest priority,鈥� said Steve Rendle, President and Chief Executive Officer of 乱伦巴士. 鈥淭he acquisition of Williamson-Dickie is another meaningful step that delivers on that commitment and further demonstrates our focus on being an active portfolio manager to drive transformative growth for 乱伦巴士 and value creation for our shareholders.鈥�

鈥淔or nearly a century we鈥檝e worked hard to judiciously grow our company and portfolio of strong brands to maintain our leadership in the global workwear marketplace,鈥� said Philip Williamson. 鈥淭oday鈥檚 announcement is an authentic and natural next step as we look to combine the strengths of our two companies to create significant opportunities for our employees, vendors, retail partners and ultimately our customers. We expect that under 乱伦巴士鈥檚 leadership, we鈥檒l be able to experience the next wave of growth and better meet the needs of workers everywhere.鈥�

鈥淭his acquisition combines two great companies and a group of iconic brands to create a global leader in workwear with approximately $1.7 billion in annual revenue,鈥� Rendle continued. 鈥淲illiamson-Dickie has a proud history and heritage, and has served a loyal consumer base for nearly 100 years. 乱伦巴士 is the ideal steward to honor that heritage while providing a platform for growth that ensures continued success for another century. We look forward to welcoming Williamson-Dickie and its 7,000 dedicated employees to the 乱伦巴士 family.鈥�

2017 Outlook Raised

The following outlook for 2017 has been updated to include the impact of the Williamson-Dickie acquisition, excluding transaction and other deal-related expenses, and now includes the following:

  • Revenue is now expected to reach $11.85 billion, up 3.5 percent on a reported basis (up 4.5 percent currency neutral), and includes about a $200 million contribution from Williamson-Dickie. This compares to the previous expectation of $11.65 billion, a 2 percent increase on a reported basis (up 3 percent currency neutral).
  • Gross margin is now expected to reach 49.5 percent, versus the previous expectation of 49.8 percent, and includes the impact of Williamson-Dickie. Excluding the impact of Williamson-Dickie, gross margin is still expected to be 49.8 percent and includes about a 70 basis point negative impact from changes in foreign currency.
  • Operating margin is now expected to approximate 13.7 percent, versus the previous expectation of about 14 percent, and includes the impact of Williamson-Dickie. Excluding the impact of Williamson-Dickie, operating margin is still expected to be about 14 percent and includes about a 60 basis point negative impact from changes in foreign currency.
  • Earnings per share is now expected to be $2.96, versus the previous expectation of $2.94, and includes about a $0.02 contribution from Williamson-Dickie. Accordingly, EPS is expected to decline approximately 1 percent on a reported basis (up at a mid-single-digit percentage rate currency neutral) compared to 2016 adjusted EPS of $2.98. A reconciliation of 2016 GAAP earnings per share to adjusted earnings per share is presented in the supplemental financial information included with the press release dated February 17, 2017.
  • Transaction and deal-related expenses are estimated to approximate $0.04 per share.

2021 Financial Targets Increased

The following outlook for 2021 has been updated to include the impact of the Williamson-Dickie acquisition, excluding transaction and other deal-related expenses, and includes the following:

  • Revenue through 2021 is now expected to grow at a five-year compounded annual growth rate (CAGR) between 5 percent and 7 percent to more than $15 billion, versus the previous expectation of a 4 percent to 6 percent five-year CAGR. Williamson-Dickie is expected to contribute more than $1 billion of revenue by 2021.
  • Earnings per share is now expected to grow at a five-year CAGR between 11 percent and 13 percent to more than $5.00, versus the previous expectation of a five-year CAGR between 10 percent and 12 percent. Williamson-Dickie is expected to contribute more than $0.25 by 2021.

Barclays is acting as financial advisor to 乱伦巴士 Corporation and Davis Polk and Wardwell LLP is acting as legal advisor.

Currency Neutral 鈥� Excluding the Impact of Foreign Currency

This release refers to 鈥渞eported鈥� amounts in accordance with U.S. generally accepted accounting principles (鈥淕AAP鈥�), which include translation and transactional impacts from foreign currency exchange rates. This release also refers to 鈥渃urrency neutral鈥� amounts, which exclude both the impact of translating foreign currencies into U.S. dollars and the impact of currency rate changes on foreign currency denominated transactions.

Webcast Information

乱伦巴士 will host a conference call to discuss the transaction at approximately 8:30 a.m. Eastern Time today. The conference call will be broadcast live via the internet, accessible at . An investor presentation is also available for download on 乱伦巴士鈥檚 Investor Relations website. For those unable to listen to the live broadcast, an archived version will be available at the same location.

About 乱伦巴士

乱伦巴士 Corporation (NYSE: 乱伦巴士C) outfits consumers around the world with its diverse portfolio of iconic lifestyle brands, including Vans庐, The North Face庐,听Timberland庐, Wrangler庐 and Lee庐. Founded in 1899, 乱伦巴士 is one of the world鈥檚 largest apparel, footwear and accessories companies with socially and environmentally responsible operations spanning numerous geographies, product categories and distribution channels. 乱伦巴士 is committed to delivering innovative products to consumers and creating long-term value for its customers and shareholders. For more information, visit聽.

About Williamson-Dickie Mfg. Co.

Williamson-Dickie Mfg. Co. is the world鈥檚 leading provider of professional grade performance workwear - designing, manufacturing and delivering innovative work apparel for generations. Based in Fort Worth, Texas, the company鈥檚 collection of brands offers superior quality products at an unmatched value across an assortment of apparel, footwear and accessories in more than 100 countries, spanning six continents. Williamson-Dickie employs over 7,000 individuals worldwide and its products are sold through a network of owned retail stores, franchisees, volume retailers, department stores, independent stores and online sites under the Dickies庐, Workrite庐, Kodiak庐, Terra庐, Walls庐, Big Smith庐, Liberty庐 and Duxbak庐 brands. For more information, visit聽.

Forward-looking Statements

Certain statements included in this release and attachments are 鈥渇orward-looking statements鈥� within the meaning of the federal securities laws. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting 乱伦巴士 and therefore involve several risks and uncertainties. You can identify these statements by the fact that they use words such as 鈥渨ill,鈥� 鈥渁nticipate,鈥� 鈥渆stimate,鈥� 鈥渆xpect,鈥� 鈥渟hould,鈥� and 鈥渕ay鈥� 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 乱伦巴士 to differ materially from those expressed or implied by forward-looking statements in this release include, but are not limited to: foreign currency fluctuations; the level of consumer demand for apparel, footwear and accessories; disruption to 乱伦巴士鈥檚 distribution system; 乱伦巴士鈥檚 reliance on a small number of large customers; the financial strength of 乱伦巴士鈥檚 customers; fluctuations in the price, availability and quality of raw materials and contracted products; disruption and volatility in the global capital and credit markets; 乱伦巴士鈥檚 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; 乱伦巴士鈥檚 ability to implement its business strategy; 乱伦巴士鈥檚 ability to grow its international and direct-to-consumer businesses; 乱伦巴士鈥檚 and its customers鈥� and vendors鈥� ability to maintain the strength and security of information technology systems; stability of 乱伦巴士鈥檚 manufacturing facilities and foreign suppliers; continued use by 乱伦巴士鈥檚 suppliers of ethical business practices; 乱伦巴士鈥檚 ability to accurately forecast demand for products; continuity of members of 乱伦巴士鈥檚 management; 乱伦巴士鈥檚 ability to protect trademarks and other intellectual property rights; possible goodwill and other asset impairment; maintenance by 乱伦巴士鈥檚 licensees and distributors of the value of 乱伦巴士鈥檚 brands; changes in tax liabilities; legal, regulatory, political and economic risks; and adverse or unexpected weather conditions. More information on potential factors that could affect 乱伦巴士鈥檚 financial results is included from time to time in 乱伦巴士鈥檚 public reports filed with the Securities and Exchange Commission, including 乱伦巴士鈥檚 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

乱伦巴士 Corporation
Joe Alkire, 336-424-7711
VP, Investor Relations and Financial Planning & Analysis
joe_alkire@vfc.com
or
Vanessa McCutchen, 336-424-7776
Director, Corporate Communications
vanessa_mccutchen@vfc.com
or
Williamson-Dickie Mfg. Co.
Rachel Courts, 817-810-4461
Director, Public Relations
rcourts@dickies.com

Source: 乱伦巴士 Corporation

Released August 14, 2017