VF Corporation has signed a definitive agreement to acquire all the outstanding stock of Reef Holdings Corporation from an investor group led by majority shareholder Swander Pace Capital. Terms were not disclosed.
Reef had sales of $75 million in 2004 excluding royalties, and is looking forward to another year of double-digit growth in 2005. Reef is expected to contribute about $45 million to sales, be neutral to earnings per share in 2005 and accretive in 2006.
Reef will remain headquartered in San Diego, California and will become part of VF's expanding Outdoor coalition, headed by Eric Wiseman, vice president and chairman of VF's Outdoor and Sportswear Coalitions. Outdoor coalition sales exceeded the $1 billion mark in 2004, and have grown nearly seven-fold over the past 5 years.
“As one of the world's great authentic surf brands, Reef® will be a terrific addition to our outdoor portfolio,” said Wiseman. “We look forward to working with Reef's talented and highly experienced management team to support continued growth in their core footwear business and realize the significant opportunity to further expand their apparel offerings.”
Added Reef president and chief executive officer, Dave Gatto, “VF has demonstrated its ability to successfully build and acquire strong lifestyle brands, at the same time ensuring that each brand's unique culture remains intact. We're enthusiastic about the prospects for continued growth in all our markets and categories, based on the combination of our disciplined commitment to our core market and VF's global resources.”
The acquisition, which will be funded with existing cash balances and is expected to be completed by the end of April, is subject to normal closing conditions.
