Paying down a chunk of its debt from its $1.2 billion acquisition of Collective Brands Performance & Lifestyle Group (Sperry Top-Sider, Saucony, Keds, Stride Rite), Wolverine World Wide is again actively looking to acquire brands. But rather than tuck-ins like the past, the company is looking to buy larger brands to complement its 15-brand portfolio. Weve looked at some in the last 12 to 18 months, some more closely than others, said Don Grimes Wolverines SVP, CFO and treasurer, at Goldman Sachs Global Retailing Conference. It has to be the right strategic fit, at the right price, adding the right value to the company and for our shareholders.

But he noted that prior to early 2009, Wolverine would pursue small tuck-in acquisitions, such as Chaco, an $11 million transaction; and Cushe, a $5 million transaction. Now, Wolverine is looking for a brand at least $75 million to $100 million in size, with the potential to reach $500 million in the not-too-distant future operating under Wolverine’s infrastructure. Said Grimes, To do a $20 million acquisition and to perhaps unnecessarily complicate the portfolio for something that’s not very big today, when youre almost a $3 billion a year topline Company, really doesnt make a lot of sense.

He added, So have we missed out on some great small brands that have some great technology? We might. But, again, recognizing that there is a trade-off there between adding small brands and seeing what works out.

Asked what type of categories Wolverine is seeking to add through a potential acquisition, Grimes noted that with Wolverine, Cat, HyTest and Bates, Wolverine is pretty well covered in work boots and would likely not add another in that category. Outdoor inspired brands – whether footwear or apparel-offers lots of opportunity to add brands to the portfolio. Grimes adds, Thats something that were good at and we know how to manage through the outdoor channels and managing outdoor brand.

With the PLG acquisition, Wolverine has extended into the lifestyle arena in a bigger way and would be more open than in the past to lifestyle/casual apparel or footwear brands. More fashion-driven of designer brands wouldnt make as much sense they go against Wolverines DNA. But he noted theres a plethora of brands available in the casual lifestyle arena that would be appropriate for Wolverine.

Despite the move last quarter to exit its Patagonia Footwear license, which did about $20 million in sales; Grimes said Wolverines current organization structure-set around its Performance, Heritage and Lifestyle groups-creates significant synergies across the 15 brands, implying other exits werent forthcoming. Added Grimes, Can we do things better? Sure we can, but I think that the way were structured fits with the portfolio where you have not a single-brand dominant company or two-brand dominant company.

Asked about the M&A climate, Grimes doesnt see the environment any less plentiful now than it has been in the recent past, but he said sellers expectations depend on the category. He pointed out that Columbias acquisition of Prana supported a a pretty rich multiple, but it was a strongly growing brand in a hot category, so the multiple is justified.

As far as the potential size of an acquisition, Grimes said Wolverine could support a $1 billion acquisition. He noted that Wolverine was 4 times net leverage when it closed the PLG acquisition and has reduced that to less than 2.75 times in the second quarter. He added, Are we scouring the landscape for $1 billion acquisition? No, were not; we are looking for the right acquisition that adds value to the company, but certainly a leverage ratio of north of where we are today would be something wed be fairly comfortable with.

Grimes also reiterated that Wolverine expects Q3 revenues and earnings to be flat with the prior year. Thats partly because the quarter is facing tough comparisons against Q313s revenue growth in the very high-single digits with EPS growing over 60 percent. Very strong revenue growth is then expected for Q4, driven by an extra week in this years quarter, some growth at Sperry due to the launch of apparel at its stores, a continued recovery at Merrell, and double-digit growth continuing for Chaco, Cat Footwear and Keds. Also supporting the Q4 growth is expected continued strength in the EMEA region and additional store openings.

Grimes also acknowledged that the current hot-spot in footwear is basketball and the broader athletic category, which is supporting continued growth at its Saucony brand. But he said casual footwear showed some recovery in the second quarter after being hurt in the fourth and first quarter by the extended winter weather. Shifts in the Easter holiday shopping season prevented a better showing in the second quarter. Said Grimes, Casual footwear has recovered, but it’s not where it was pre-winter last year.