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VF to Acquire Williamson-Dickie in $820 million Cash Deal



VF Corporation to expand its workwear portfolio with the acquisition of chief competitor Williamson-Dickie.

VF will pay $820 million in cash for the privately-owned business. The merger agreement, which was announced today, will bring the Dickies brands under the same umbrella as VF’s outdoor, action sports and jeans labels like Vans, Wrangler and Timberland.

The transaction is expected to close in the fourth quarter.

Steve Rendle, president and CEO of VF, identified the $30 billion global workwear market as a key opportunity for the company during its Investor Day in March.

“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,” Rendle said. “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.”

The Dickies brands, which generated $875 million in revenue during the trailing 12 months, will join Bulwark, Red Kap and Wrangler Riggs in VF’s Imagewear coalition. It also satisfies a chief concern of VF’s shareholders, who noted a lack of M&A activity as a potential weakness for the company.

[Read more about VF’s financials: Financial Roundup: VF Scores on Direct Sales, Columbia’s Brands All See Gains, Repreve Leads Unifi, E-Commerce Aids Carter’s]

During the presentation that accompanied today’s announcement, VF stated its responsive supply chain and cost advantages will be two benefits to the Williamson-Dickie business specifically and its workwear category in general.

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“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,” said Philip Williamson, CEO of Williamson-Dickie, who will remain with the company.

VF updated its 2017 outlook based on the news. The company expects revenue to be up 3.5% to $11.85 billion, including $200 million from Williamson-Dickie. That’s compared to the previous outlook of $11.65 billion, a 2 percent increase. Gross margin is expected to reach 49.5%, compared to the previously reported 49.8%. Operating margin is expected to be 13.7%, down from 14%. And EPS is predicted to be $2.96 versus $2.94.

Williamson-Dickies is expected to contribute more than $1 billion in revenue by 2021, boosting overall revenue and EPS targets for the company.

VF has undergone major changes to its portfolio over the last decade, including divesting of its Vanity Fair intimates business in 2006, acquiring Timberland in 2010 and selling its contemporary brands, including 7 for All Mankind, Splendid and Ella Moss to Delta Galil last year—all in the service of focusing on lifestyle product in the outdoor, action sports and jeans arenas.

Williamson-Dickie launched in 1922 as a bib overall company and has grown into a global workwear business.