Wolverine, along with Blum Capital Partners and Golden Gate Capital, will pay $21.75 for each Collective Brands share — a 4.7 percent premium to the stock’s close on Monday.
The stock has doubled in value since the company announced it would conduct a strategic review in August. Recent media reports had said South Korean retailer E-Land and Wolverine were interested in buying the owner of Payless ShoeSource, one of the largest footwear retailers in the world.
Payless ShoeSource and Collective’s international licensing business, which together had sales of about $2.4 billion last year, will now be owned by Blum Capital and Golden Gate.
Wolverine Worldwide — owner of the Hush Puppies brand — will pay $1.23 billion to acquire ownership of brands like Sperry Top-Sider, Saucony, Stride Rite and Keds, which generated revenue of more than $1 billion last year.
Wolverine said the deal, seen closing later this year, will have a minimal impact on its 2012 results, but is expected to add 25 cents to 40 cents per share to its earnings in 2013.
Including debt, the deal is valued at about $2.0 billion.
Perella Weinberg Partners and Sullivan & Cromwell LLP advised Collective Brands, while Wolverine Worldwide was advised by Robert W. Baird and Barnes & Thornburg LLP. Kirkland & Ellis LLP is the legal advisor to Blum Capital and Golden Gate Capital.
Collective Brands shares were trading at $21.18 on Tuesday morning on the New York Stock Exchange.
(Reporting by Mihir Dalal and Ranjita Ganesan; Editing by Joyjeet Das)
Image Credit: Wolverine Worldwide