Following in the wake of DC and 411, Vans has just been bought. Here are the specifics:
Jeans maker VF Corp. (VFC), the world’s largest jeans maker, said Tuesday it has agreed to buy youth-sportswear maker Vans Inc. (VANS) for about 396-million dollars, in order to expand into the growing market for clothes relating to skateboarding and other action sports. Under the agreement, Vans shareholders would receive twenty dollars and 55 cents a share in cash, the company said. The purchase is giving VF a foothold in the shoe industry and a brand with a strong teen following.
Greensboro, North Carolina-based VF, whose brands include Wrangler, Lee, and North Face, said earnings jumped and sales were boosted by its acquisition of sportswear designer Nautica Enterprises and a weaker dollar. VF has been an aggressive consolidator in the apparel industry, buying Italy’s Green Sport Monte Bianco S.P.A. earlier this month to obtain the Napapijri brand. It bought Nautica last summer.
Shares of Vans rose four dollars and 49 cents, or 28 percent, to twenty dollars and 30 cents in Nasdaq trading by midday. VF shares were up 22 cents at 47 dollars and 54 cents on the New York Stock Exchange.
VF reported first-quarter earnings of 103.9-million dollars, or 93 cents per share, for the first quarter ended April 3. That was up from 92.1-million dollars, or 83 cents per share, a year earlier. Sales rose 14.6 percent to 1.43-billion dollars.
Last month, VF said sales had veered to the high end of its forecast, leading analysts to raise their earnings estimates, on average, to 87 cents per share, according to Reuters Research.
Nautica added three cents per share to earnings in the quarter and the weak dollar added five cents per share, VF said.
Addressing the Vans acquisition, VF said its first priority would be to help the company grow in apparel and retail. It said it expected that Vans’ sales could reach 500-million dollars in the next three to five years.
Vans has forecast sales of 346-million dollars to 349-million dollars for its current fiscal year, which ends May 31.
The transaction, which is expected to close early in VF’s third quarter, is expected to have no effect on VF’s 2004 earnings and to slightly increase its 2005 earnings.
VF said it plans to maintain Vans’ headquarters in Santa Fe Springs, California.
VF forecasts its own sales growth as high as eight percent and earnings growth of at least five percent in 2004, excluding Vans and Napapijri.
For the second quarter, VF forecasts flat to slightly higher profit and a ten percent to twelve percent increase in sales.