VF Corp. signed a definitive merger agreement to acquire Supreme, the streetwear brand. Current investors, The Carlyle Group and Goode Partners are selling their stakes in the Supreme brand. The purchase price was $2.1 billion.

The transaction is expected to be completed late in calendar year 2020, subject to customary closing conditions and regulatory approval.

Supreme sells apparel, accessories and footwear under its namesake brand globally through DTC channels, primarily digital. The Supreme brand’s founder, James Jebbia, and the senior leadership team of the brand, will remain with the company headquartered in New York City.

Key facts behind the acquisition include:

  • The acquisition accelerates VF’s consumer-minded, retail-centric, hyper-digital business model transformation;
  • The acquisition follows a long-standing relationship between Supreme and VF, with the Supreme brand a regular collaborator with VF’s Vans, The North Face and Timberland brands;
  • The Supreme brand offers a $1 billion global opportunity, over time, through international and DTC expansion, core pillars of VF’s 2024 strategy;
  • The Supreme brand’s DTC model, brand loyalty and global footprint complements the ‘street-inspired’ aspects of VF’s Vans, The North Face, Timberland, and Dickies brands;
  • The acquisition is consistent with VF’s commitment to active portfolio management and enhances VF’s growth, profitability and cash flow profile;
  • The Supreme brand is expected to be modestly accretive to VF’s revenue and adjusted EPS in fiscal 2021; and
  • The Supreme brand is expected to contribute at least $500 million of revenue and $0.20 of adjusted EPS in fiscal 2022.

“We are thrilled to welcome Supreme to the VF family and to build on our decades-long relationship as we create value for all of our stakeholders. VF is the ideal steward to honor the authentic heritage of this cultural lifestyle brand while providing the opportunity to leverage our scale and expertise to enable sustainable long-term growth,” said Steve Rendle, VF’s chairman, president, and chief executive officer. “The acquisition of the Supreme brand is further validation of our vision and strategy to further evolve our portfolio of brands to align with the total addressable market opportunities we see driving the apparel and footwear sector. The Supreme brand will further accelerate VF’s hyper-digital business model transformation and will be a meaningful driver of VF’s commitment to top-quartile total shareholder return and long-term value creation.”

“We are proud to join VF, a world-class company that is home to great brands we’ve worked with for years, including The North Face, Vans and Timberland,” said Jebbia. “This partnership will maintain our unique culture and independence while allowing us to grow on the same path we’ve been on since 1994.”

Morgan Stanley provided a fairness opinion in connection with the transaction, and Davis Polk & Wardwell LLP served as legal advisor.

Photo courtesy VF/TNF x Supreme