For more analysis on this deal, click here to read our Q&A with Helly Hansen CEO Paul Stoneham.

Canadian Tire Corporation Ltd. has agreed to purchase Helly Hansen, the maker of sportswear and workwear based in Oslo, Norway. The purchase price was Canadian $985 million (U.S. $771 mm).

Canadian Tire will acquire the company from Ontario Teachers’ Pension Plan, which owns and operates the Helly Hansen brands and related businesses.

Founded in 1877, Helly Hansen’s core categories include sailing, skiing, mountain, urban, rainwear and workwear. With wholesale and retail distribution capabilities, the brand sells to more than 40 countries.

Outdoor and workwear categories are core to CTC’s retail banners and, through Mark’s and FGL, the company has had a long history with Helly Hansen as one of its largest customers. This acquisition strengthens CTC’s core businesses across multiple banners, increases its brand offerings in Canada and its ability to grow its brands internationally.

“For more than ten years, Helly Hansen has been an exceptional fit with CTC and this acquisition will strengthen our assortment across all of our banners,” said Stephen Wetmore , president and CEO, Canadian Tire Corporation. “With our capabilities and Helly Hansen’s trusted global brand and management team, we see tremendous opportunity for CTC and Helly Hansen, in Canada and internationally.”

“CTC provides us with the ideal platform to further accelerate our growth trajectory and also strengthen our Canadian presence. This is a great opportunity for Helly Hansen and our team,” said Paul Stoneham, CEO, Helly Hansen. “As a Canadian, I am particularly proud to say that Canadian Tire is the new home for Helly Hansen.”

Transaction Details

CTC has agreed to purchase the company that owns and operates the Helly Hansen brands and related businesses for C$985 million, and is assuming approximately C$50 million of operating debt, net of cash. The acquisition is expected to close in Q3 2018 and is subject to usual closing conditions. The transaction will be immediately accretive to EPS, EBITDA and cash flow, before the realization of synergies. The transaction is not subject to financing conditions. CTC has ample financial flexibility to fund the acquisition and to maintain its current investment grade credit rating. Paul Stoneham, CEO, Helly Hansen, and the management team, based in Oslo, Norway, will continue to lead the business, reporting to CTC Executive Vice President Mahes Wickramasinghe.

CTC said it remains committed to its published three-year financial aspirations, and expects to complete its previously announced share repurchase program in 2018.

Photo courtesy Helly Hansen