Greensboro-based Kontoor Brands, which owns the iconic Wrangler and Lee jeans brands, agreed to buy Norwegian outdoor and workwear brand Helly Hansen in a deal valued at about $900 million.
Kontoor will acquire Helly Hansen from Canadian Tire, a Toronto-based retail company that has owned the Oslo, Norway-based company since 2018.
“Given our global platform and proven track record of operational excellence in owning brands rooted in heritage, quality, authenticity and innovation, Kontoor Brands is uniquely positioned to partner with Helly Hansen management to scale and elevate the business globally,” says Kontoor Brands CEO Scott Baxter in a release. He called the deal a “perfect fit for our strategy to evolve and expand our portfolio of brands, accelerate growth, and deliver long-term value for our shareholders.”
Norwegian sea Capt. Helly Juell Hansen founded Helly Hansen with his wife Maren Margrethe in 1877 while studying how to make water-resistant clothing for workers at sea. Its products are used by elite sailors, more than 55,000 mountain professionals and guides in more than 200 ski resorts, according to the company.
Kontoor sees the acquisition as a way to increase market share in the outdoor and workwear markets. Kontoor expects Helly Hansen to generate more than $680 million of revenue and $80 million of adjusted operating income this year,excluding synergies.
Plans call for closing the deal by June 30.
This week, Kontoor reported fourth-quarter adjusted earnings per share of $1.38, a 2% increase from a year earlier when results included a sizable tax benefit. Excluding that gain, adjusted earnings per share climbed 23%.
Revenue gained 4% to $699 million. The company said its inventory declined 22% during the year to about $390 million. It didn’t report its full-year results.
“I am pleased with our strong finish to the year, driven by better-than-expected revenue, earnings, and cash generation,” says Baxter in a release. “Full year 2024 was an incredible year for Kontoor, driven by consistent execution, investments in our brands, and the remarkable efforts of our global team.”
Kontoor split off from VF Brands in 2019 with the parent company taking the Vans, Timberland and North Face brands and moving its headquarters to Denver. The jeans business, which has grown slower in recent decades, remained in Greensboro under its new name and Baxter at the helm.
Confounding expectations, Kontoor shares have gained 127% over the past five years, while VF’s have declined 68%.
Kontoor employs about 15,000 globally, including 1,000 in North Carolina. Kontoor shares gained 4% Wednesday to close at $89.29. They have traded between $52.95 and $96.80 in the past 52 weeks. Kontoor has a market capitalization of about $4.9 billion.