The global leader in branded lifestyle apparel, footwear and accessories, VF Corporation, and Williamson-Dickie Mfg. Co, a global workwear company, have signed a definitive merger agreement. The transaction is expected to be completed this year and VF will pay Williamson-Dickie shareholders approximately $820 million in cash.
“When we introduced our 2021 global business strategy earlier this year, reshaping our portfolio to accelerate growth was our highest priority,” said Steve Rendle, president and chief executive officer of VF. “The 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 VF and value creation for our shareholders.”
“For nearly a century we’ve worked hard to judiciously grow our company and portfolio of strong brands to maintain our leadership in the global workwear marketplace,” said Philip Williamson, chief executive officer of Williamson-Dickie. “Today’s 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 VF’s leadership, we’ll be able to experience the next wave of growth and better meet the needs of workers everywhere.”
“This 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,” Rendle continued. “Williamson-Dickie has a proud history and heritage, and has served a loyal consumer base for nearly 100 years. VF is the ideal steward to honour 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 VF family.”
For 2017, the revenue for VF Corporation is expected to reach $11.85 billion, up 3.5 per cent on a reported basis (up 4.5 per cent currency neutral), and includes about a $200 million contribution from Williamson-Dickie. This compares to the previous expectation of $11.65 billion, a 2 per cent increase on a reported basis (up 3 per cent currency neutral).
It is expected that the gross margin will be 49.5 per cent, versus the previous expectation of 49.8 per cent, and includes the impact of Williamson-Dickie. Excluding the impact of Williamson-Dickie, gross margin is still expected to be 49.8 per cent and includes about a 70 basis point negative impact from changes in foreign currency.
The company’s operating margin will be approximate 13.7 per cent for the fiscal year 2017, versus the previous expectation of about 14 per cent, and includes the impact of Williamson-Dickie. Excluding the impact of Williamson-Dickie, operating margin is still expected to be about 14 per cent and includes about a 60 basis point negative impact from changes in foreign currency.