Kontoor Brands Announces Definitive Agreement to Acquire Iconic Global Outdoor and Workwear Brand Helly Hansen®
- Acquisition accelerates Kontoor’s revenue, earnings growth and cash flow profile and enhances the Company’s TSR model
- Adds global brand with scale and increases penetration in the large and growing Outdoor and Workwear categories globally
- Diversifies the Company’s consumer, geographic, category and channel footprint
- Leverages Kontoor’s global, multi-brand operating platform and deep management expertise in Outdoor and Workwear
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Kontoor expects Helly Hansen to generate more than
of revenue and$680 million of adjusted EBITDA for full year 2025$80 million -
Purchase price is approximately
and reflects an approximate 11x transaction multiple based on Kontoor’s full year 2025 adjusted EBITDA outlook for Helly Hansen, excluding synergies$900 million
“We are thrilled to welcome the Helly Hansen team into Kontoor Brands and to build a future together that creates significant value for all our stakeholders. 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,” said Scott Baxter, President, Chief Executive Officer and Chairman of Kontoor Brands. “The acquisition of Helly Hansen is the perfect fit for our strategy to evolve and expand our portfolio of brands, accelerate growth, and deliver long-term value for our shareholders. I want to thank the Canadian Tire and Helly Hansen teams for the partnership in this process. I couldn’t be more excited for the future of Kontoor Brands and our stakeholders.”
Joe Alkire, Kontoor Brands’ Executive Vice President and Chief Financial Officer added, “Our strong balance sheet and operating cash flows provide us with significant capital allocation optionality, which we are employing in the acquisition of Helly Hansen. The acquisition will accelerate our growth and earnings potential while enhancing our already strong cash flow profile. We have deep management expertise in the attractive outdoor and workwear growth categories, and expect the addition of Helly Hansen to drive accretive returns to our existing TSR commitment, supporting strong and sustainable long-term value creation for all stakeholders.”
Acquisition Highlights
The acquisition of Helly Hansen builds on Kontoor’s success and advances its strategic and financial growth agenda. Acquisition highlights include the following:
Accelerates Revenue, Earnings Growth and Cash Flow Profile, and Increases Penetration in the Large and Growing Outdoor and Workwear Categories Globally
- Accelerates Kontoor’s growth profile, driven by a best-in-class product and innovation pipeline, with multiple category, geographic and channel expansion opportunities
- Scales Kontoor’s penetration in the large and growing Outdoor and Workwear markets globally
- Opportunity to double Helly Hansen operating margin and drive significant cash flow contribution over time through improved profitability and net working capital management
Diversifies Kontoor’s Portfolio Across Channels, Geographies, Categories and Consumers
- Complementary geographic, category, and channel footprint provides significant diversification benefits
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Leverages Kontoor’s strong
U.S. presence while providing International scale benefits inEurope , Non-U.S. Americas , andAsia Pacific - Provides access to affluent, active, and younger consumer base
Leverages Kontoor’s Global, Multi-Brand Operating Platform and Deep Management Expertise
- Helly Hansen to benefit from Kontoor’s scaled, multi-brand global operating platform
- Helly Hansen a more synergistic fit as part of a global, brand operator ownership structure
- Meaningful sources of synergies identified across Kontoor’s supply chain platform, technology capabilities, tax structure, and other scale and operating efficiencies
- Leverages Kontoor’s deep management expertise in outdoor and workwear categories globally
- Strong cultural alignment and proven Helly Hansen management team with long track record of success
Fast Path to Reduce Financial Leverage
- Expect to fund the transaction through a combination of excess cash on hand and new debt financing
- Net leverage expected to be less than 3x trailing twelve months’ pro forma adjusted EBITDA at the transaction close date
- On a combined basis, strong cash generation supports return to targeted net leverage range of between 1.0x and 2.0x within 12 months
Immediately Revenue, Earnings and Cash Flow Accretive with Opportunity to Drive Significant Shareholder Value Creation and Enhance Long-Term Capital Allocation Optionality
- Expect to deliver strong financial returns and meaningful earnings and cash flow accretion in 2025, excluding synergies
- Expect to achieve meaningful synergies over time, supported by operating efficiencies and improved net working capital management
- Accelerating operating profit and cash flow supports increased capital allocation optionality once financial leverage has been reduced
- Accretive to Kontoor Brands’ existing TSR commitment through enhanced fundamental growth model
Transaction Details
The Board of Directors of Kontoor Brands has approved the transaction. The transaction is expected to close in the second fiscal quarter of 2025, subject to the receipt of required regulatory approvals and customary closing conditions.
Kontoor expects to finance the transaction with a combination of cash on hand and new debt.
Advisors
Morgan Stanley & Co. LLC is serving as Kontoor Brands’ exclusive financial advisor and Foley & Lardner LLP as its legal advisor.
Webcast Information
Kontoor Brands will host a conference call and management presentation to discuss the proposed transaction beginning at 8:30 a.m. Eastern Time today, February 19, 2025. The conference will be broadcast live via the Internet, along with the related presentation, accessible at https://www.kontoorbrands.com/investors. For those unable to listen to the live broadcast, an archived version will be available at the same location.
About Kontoor Brands
Kontoor Brands, Inc. (NYSE: KTB) is a global lifestyle apparel company, with a portfolio led by two of the world’s most iconic consumer brands: Wrangler® and Lee®. Kontoor designs, manufactures, distributes, and licenses superior high-quality products that look good and fit right, giving people around the world the freedom and confidence to express themselves. Kontoor Brands is a purpose-led organization focused on leveraging its global platform, strategic sourcing model and best-in-class supply chain to drive brand growth and deliver long-term value for its stakeholders. For more information about Kontoor Brands, please visit www.KontoorBrands.com.
About Helly Hansen®
Founded in
Disclosures
Financial estimates for the Helly Hansen business are based on Kontoor’s expectation of future performance. These estimates are based on Helly Hansen’s historical accounting practices under Norwegian Generally Accepted Accounting Principles, which are not anticipated to materially differ from
Forward-Looking Statements
Certain statements included in this release and attachments are "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting the Company and therefore involve several risks and uncertainties. You can identify these statements by the fact that they use words such as “will,” “anticipate,” “estimate,” “expect,” “should,” “may” and other words and terms of similar meaning or use of future dates. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. We do not intend to update any of these forward-looking statements or publicly announce the results of any revisions to these forward-looking statements, other than as required under the
More information on potential factors that could affect the Company's financial results are described in detail in the Company’s most recent Annual Report on Form 10-K and in other reports and statements that the Company files with the SEC.
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Investors:
Michael Karapetian, (336) 332-4263
Vice President, Corporate Development, Strategy, and Investor Relations
Michael.Karapetian@kontoorbrands.com
or
Media:
Julia Burge, (336) 332-5122
Director, External Communications
Julia.Burge@kontoorbrands.com
Source: Kontoor Brands, Inc.