VF Corporation completed its previously announced acquisition of The Timberland Company. It also established a new management structure for the brand, with Patrik Frisk becoming president of Timberland. Jeff Swartz, Timberland's former president and CEO, is leaving to pursue other interests.
As reported, VF paid $43 per share, or $2.3 billion for Timberland, which reported 2010 revenues of $1.4 billion. Stratham, N.H.-based Timberland was folded into VF’s California-based Outdoor & Action Sports coalition, which includes the The North Face and Van's brands. Timberland and Smartwool will remain headquartered in Stratham and Steamboat Springs, CO, respectively.
“This is a tremendously exciting day for VF. We are delighted to officially welcome Timberland and Smartwool to VF’s family of brands,” said Eric Wiseman, VF chairman and chief executive officer. “This acquisition strengthens VF’s position within the outdoor industry by adding two strong, global, and authentic brands with significant momentum and growth opportunities. VF is committed to helping the Timberland and Smartwool brands reach their global growth potential, while maintaining each brand’s unique essence.”
“Today marks the beginning of a very exciting chapter for Timberland,” said Jeff Swartz, former Timberland president and CEO. “I am confident that while our ownership structure has changed, what makes Timberland unique and special will not. VF has an enviable track record of allowing its brands to execute their distinct strategic visions. This is the right time to take the Timberland and Smartwool brands to the next level, and VF – which is as passionate about building brands as we are – is the right partner for us.”
The Timberland acquisition is expected to be immediately accretive to VF's earnings per share, by approximately 45 cents a share in 2011, excluding acquisition related expenses. Inclusive of these expenses, the earnings accretion would be about 25 cents per share. It is also expected to add about $700 million to VF's 2011 revenues.
VF has completed its acquisition financing with the issuance on Aug. 24 of $400 million in floating rate notes due 2013 and $500 million of 3.5% notes due 2021. The balance of the acquisition price has been funded through a combination of cash on hand and commercial paper.
New Leadership Structure
Patrik Frisk, 48, who has been serving since 2009 as president, VF Outdoor & Action Sports EMEA, has been named president of Timberland. He will report to Steve Rendle, group president, VF Outdoor & Action Sports Americas. In his new role, Patrik will serve as the global leader for the Timberland brand, working in partnership with international leaders across both Europe and Asia to deliver the brand’s full growth potential. He will be relocating to the Stratham area in the near future.
Richard O’Rourke, 58, will continue as senior vice president, international, with responsibility for the Timberland brand in the EMEA and Asia and for global distributors. O’Rourke will continue to be based in Wexham, U.K., and will report to Karl Heinz Salzburger, Group President, VF International.
Mark Satkiewcz, 43, will continue to lead Smartwool as president of Smartwool Americas, and remain in Steamboat Springs. He will also report to Rendle.
Each of these leaders will be supported by strong teams of well-established leaders within the Timberland and Smartwool organizations.
Additionally, Carden Welsh, senior vice president and chief administrative officer and a member of Timberland’s board of directors, who has provided critical insight and strategic direction to the company for the past four years, has agreed to stay through December. He will serve as an executive advisor to both Rendle and Frisk.
Jeff Swartz is leaving Timberland to pursue other interests. In addition to Swartz, there are two other departures from the company. Carrie Teffner, vice president and CFOr, who has been with Timberland since 2009, will leave the company in September. Danette Wineberg, vice president, general counsel and secretary, is also departing this month, following a 14-year career with the company.
“The Swartz family and the company's leadership team have built strong outdoor brands that share an equally strong commitment to their people, their communities and the environment,” Wiseman said. “We thank Jeff, Carrie and Danette for their leadership and all they have done for Timberland, and we wish them great success in the future.”
Rendle commented: “We are fortunate to have such a broad and diverse base of exceptional talent within both the Timberland and Smartwool organizations. Combined with the substantial global resources of VF, we have a winning formula for growth.”
Added Salzburger, “With over half its revenues coming from international markets, Timberland is already well-positioned as a global brand. We look forward to leveraging VF’s platforms in both Europe and Asia to drive both the Timberland and Smartwool businesses to new heights.”
