VF Outdoor, Inc. is in negotiation to acquire Eagle Creek, Inc. Eagle Creek currently has annual sales of approximately $30 million. Terms were not disclosed, but SEW suspects that Eagle creek sold for a premium, given the brand equity company founder Steve Barker and his team has built over the last 20 years. Industry watchers expect the deal closed for $32 million to $35 million, or close to 1.2X sales.
The synergies are apparent with bag and luggage sourcing already in-place at VF through their JanSport and Eastpak brands. In addition, VF seems to have brands that do business in categories all around Eagle Creek, but none that are in direct competition for the adventure travel market. In particular, Eagle Creeks travel accessory business will be a nice addition for the VF Outdoor Coalition.
“We're excited at the prospect of adding the industry's authentic outdoor travel brand to our existing portfolio of outstanding brands,” Dave Gatto, president of VF Outdoor, Inc. said in a press release. “Growth in the travel category is outpacing growth of the total outdoor business, and we expect this to continue given the desirability of travel among both baby boomers and Gen Y consumers Eagle Creek's strong product pipeline, combined with VF Outdoor's proven ability to execute international brand growth strategies, should enable the Eagle Creek brand to sustain high-single digit sales growth over the next several years.”
Eagle Creek brand products are currently sold through 700 outdoor specialty and 300 luggage specialty accounts. The brand is also sold in other international markets through distributors and licensees.
VF said in their official announcement that they are only “in negotiations” with Eagle Creek, but sources close to the deal claim that the transaction is simply waiting on various governmental approvals before the paperwork is signed. Closing of the transaction is expected to occur within 30 days.
Eagle Creek will remain based in Vista, California. Founder and President Steve Barker will continue to manage the brand, reporting to Gatto. Eagle Creeks EVP, Ricky Schlesinger will also continue in his current role. Eagle Creek was advised by Silver Steep Partners while VF had no advisors for this deal.