Phoenix Footwear Group, Inc. has signed a letter of intent to acquire H.S. Trask & Co., a Montana-based designer of men’s casual boots and shoes. Phoenix Footwear is also expected to announce that its stockholders have approved an amendment to its certificate of incorporation so that it can implement its previously announced 2-for-1 stock split.
The transaction will unite two footwear companies with complimentary assets and strong reputations for creating high quality casual shoes, and marks Phoenix Footwear’s entry into the men’s casual footwear category. Phoenix Footwear anticipates that the acquisition will increase its sales on an annual basis by 20% to 30%.
The transaction consideration consists of cash and Phoenix Footwear stock. The transaction is subject to the execution of a definitive agreement and approval of H.S. Trask & Co.’s stockholders. Phoenix Footwear did not disclose any other terms of the transaction. The parties are expected to sign a definitive agreement in the near future. The transaction is expected to close in the second half of 2003.
James R. Riedman, CEO of Phoenix Footwear, commented, “Today’s acquisition is consistent with our long-term strategy of prudently expanding our brand portfolio, as the addition of H.S. Trask provides us with a well-known men’s footwear brand with strong sales and high growth potential. In addition, the acquisition is expected to be accretive to earnings in 2004, as potential distribution and cost-saving synergies translate into further profitability. Harrison Trask is a true visionary who shares our commitment to creating high quality comfortable footwear, and we look forward to working with him as we integrate the H.S. Trask brand into the Phoenix Footwear portfolio.”
Greg A. Tunney, President and COO of Phoenix Footwear, added, “With a complete line of casual men’s footwear made exclusively from America’s Original Leathers(TM), H.S. Trask is one of the few authentic American lifestyle brands. Utilizing these soft, yet durable leathers to create a comfortable, appealing men’s footwear brand, H.S. Trask has achieved strong market penetration and a loyal customer base. Now, with the addition of Phoenix Footwear’s resources, we feel we can profitably transition the H.S. Trask brand into a full-scale line of men’s casual footwear.”
Commenting on the transaction, Harrison Trask, Chairman and Chief Executive Officer of H.S. Trask & Co, said, “We are pleased to align ourselves with a company that shares our philosophy of having a high commitment to the integrity of its brands. Additionally, we are pleased to be able to present our stockholders with the opportunity to participate in Phoenix Footwear’s anticipated future growth.”
Under the terms of the transaction, Harrison Trask will join the Phoenix Footwear management team. Phoenix Footwear’s officers will continue with James R. Riedman as the Chief Executive Officer of Phoenix Footwear, Kenneth Wolf as the Chief Financial Officer, and Greg A. Tunney as the Chief Operating Officer.
