Phoenix Footwear Group, Inc. has signed a definitive asset purchase agreement to acquire Chambers Belt Company, a leading manufacturer of men's and women's belts and accessories.
Under the terms of the definitive agreement, Phoenix Footwear will pay $21.5 million for the assets of Chambers Belt, which will be funded through a combination of cash and Phoenix Footwear common stock. The cash portion of the purchase price is expected to be funded through new debt financing. In addition, Phoenix Footwear will pay $3.0 million in non-compete payments over a five year period and earn-out payments to be made in either cash and Phoenix Footwear common stock during the two years after closing, provided that the Chambers Belt business exceeds earnings performance targets during that period.
The acquisition, which is subject to financing and other customary closing conditions, including third party consents, is expected to close in the second quarter of 2005. Following the close of the transaction, several key members of Chambers' management team are to maintain leadership roles at the unit, including Charlie Stewart, CEO, Kelly Green, President of the women's belt division, and Dave Matheson, Vice President of Marketing and Sales.