Timberland to be taken over by VF Corporation in $2bn deal

Timberland, purveyor of rugged boots and waterproof jackets to outdoorsy types, is being taken over by the world's largest apparel company, in a $2bn(£1.2bn) deal.

VF Corporation, whose portfolio of brands already includes Lee and Wrangler jeans, Vans shoes and The North Face brand, said outdoor clothing was among the fastest-growing apparel categories, and central to its plans for growth in the coming years.

"The Timberland brand is synonymous with high quality outdoor footwear and apparel," said Eric Wiseman, VF Corporation's chief executive, who added that the company had been number one on its acquisition hit list for years. "The unique rugged outdoor positioning of Timberland will perfectly complement the premium, technical positioning of The North Face brand."

The addition of Timberland hiking boots to the corporate wardrobe excited investors, who sent VF Corporation's shares up more than 10 per cent, their best one-day performance since 2008.

The deal has received the backing of Timberland's founding Swartz family, VF Group said.

Nathan Swartz turned Abington Shoe Company, a small-time Massachusetts manufacturer which he bought in 1952, into a global powerhouse thanks to the creation of the Timberland boot in 1973. The company, which is now run by his grandson, Jeffrey Swartz, makes $1.6bn in annual sales, half of which are in the US.

"Timberland is proud of its rich heritage, its track record of success and its reputation as a responsible and environmentally conscious global citizen, all of which will be preserved and enhanced by becoming part of the VF family of brands," Mr Swartz said.

Now based in New Hampshire, Timberland also owns the Mountain Athletics and SmartWool brands.

These days it claims a mission to "equip people to make a difference in their world". It says: "We make boots, shoes, clothes and gear that are comfortable enough to wear all day and rugged enough for all year. And we don't rest on our accomplishments – if we did, we'd only have ever made one waterproof leather boot."

VF Corporation has an even richer heritage stretching back to 1899, when it was founded as the Reading Glove and Mitten Manufacturing Company in Pennsylvania. It acquired Lee Jeans in 1969 and has been steadily buying other major clothing makers and retailers since then. After yesterday's share price jump, the group has a market value of more than $12bn.

Earlier this year, Mr Wiseman said he expected outdoor clothing to do much better than what he called "heritage brands" such as Wrangler and Lee, and promised such clothing would account for 50 per cent of sales by 2015. Yesterday, he upped that target to 60 per cent.

While the deal was approved unanimously by both boards, they left open the possibility that another bidder will emerge for Timberland. The company can solicit higher bids until late next month, but will have to pay an $87.2m break fee to VF Corporation if it walks away.

The takeover is pitched at $43 per Timberland share, a 43 per cent premium to the share price at the end of last week. But the company's shares had previously fallen by about one-third on a May profit warning which blamed rising product and labour costs for disappointing results and tightening profit margins.

VF Corporation said the acquisition would add to its earnings per share immediately, but warned it would take five years to raise Timberland's margins significantly.

Analysts, though, said improvements could come sooner than that. "The takeover price is fair," said Christopher Svezia of Susquehanna. "At first blush, it seems a bit expensive, but I think Timberland is definitely on the upswing in terms of their business."

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Content Writer - Global Financial Services

£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Web Developer - PHP

£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Field Sales Consultant - Financial Services - OTE £65,000

£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Loan Underwriter

£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

Orthorexia nervosa: How becoming obsessed with healthy eating can lead to malnutrition

Orthorexia nervosa

How becoming obsessed with healthy eating can lead to malnutrition
Lady Chatterley is not obscene, says TV director

Lady Chatterley’s Lover

Director Jed Mercurio on why DH Lawrence's novel 'is not an obscene story'
Farmers in tropical forests are training ants to kill off bigger pests

Set a pest to catch a pest

Farmers in tropical forests are training ants to kill off bigger pests
Mexico: A culture that celebrates darkness as an essential part of life

The dark side of Mexico

A culture that celebrates darkness as an essential part of life
Being sexually assaulted was not your fault, Chrissie Hynde. Don't tell other victims it was theirs

Being sexually assaulted was not your fault, Chrissie Hynde

Please don't tell other victims it was theirs
A nap a day could save your life - and here's why

A nap a day could save your life

A midday nap is 'associated with reduced blood pressure'
If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

If men are so obsessed by sex...

...why do they clam up when confronted with the grisly realities?
The comedy titans of Avalon on their attempt to save BBC3

Jon Thoday and Richard Allen-Turner

The comedy titans of Avalon on their attempt to save BBC3
The bathing machine is back... but with a difference

Rolling in the deep

The bathing machine is back but with a difference
Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

Conservatives plot a motoring revolution

Draft report reveals biggest reform to regulations since driving test introduced in 1935
The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border