Helly Hansen has a new home.
Kontoor Brands, Inc., said Wednesday that it has acquired the outdoor and workwear brand for $900 million in cash and new debt.
The addition of Helly Hansen, which was acquired from Canadian Tire Corp., is expected to accelerate sales, earnings and cash flow for Kontoor, the owner of the Wrangler and Lee brands, while furthering its reach in the outdoor and workwear market.
“We are thrilled to welcome the Helly Hansen team into Kontoor Brands and to build a future together that creates significant value for all our stakeholders. Given our global platform and proven track record of operational excellence in owning brands rooted in heritage, quality, authenticity and innovation, Kontoor Brands is uniquely positioned to partner with Helly Hansen management to scale and elevate the business globally,” said Scott Baxter, president, chief executive officer and chairman of Kontoor Brands. “The acquisition of Helly Hansen is the perfect fit for our strategy to evolve and expand our portfolio of brands, accelerate growth, and deliver long-term value for our shareholders. I want to thank the Canadian Tire and Helly Hansen teams for the partnership in this process. I couldn’t be more excited for the future of Kontoor Brands and our stakeholders.”
Joe Alkire, Kontoor Brands’ executive vice president and chief financial officer, added, “Our strong balance sheet and operating cash flows provide us with significant capital allocation optionality, which we are employing in the acquisition of Helly Hansen. The acquisition will accelerate our growth and earnings potential while enhancing our already strong cash flow profile. We have deep management expertise in the attractive outdoor and workwear growth categories, and expect the addition of Helly Hansen to drive accretive returns to our existing TSR commitment, supporting strong and sustainable long-term value creation for all stakeholders.”
Kontoor was scheduled to hold an analyst call Wednesday morning to provide further details on the acquisition.
The deal marks a move into a different product category for Kontoor, which is focused on denim. Kontoor was spun out of VF Corp. so the latter could focus on its Vans, Timberland and North Face operations. Helly Hansen competes with North Face, which puts Kontoor now head-to-head with its former parent.
