VF raises outlook on Williamson-Dickie acquisition

VF Corporation and workwear company Williamson-Dickie Mfg. have jointly announced that they have signed a definitive merger agreement. A statement from VF said that the transaction is expected to be complete, early in the fourth quarter of this year and VF will pay Williamson-Dickie shareholders approximately 820 million dollars in cash. Meanwhile, to show positive impact of the deal, VF has also raised revenue and earnings outlook for 2017 and through 2021.

“When we introduced our 2021 global business strategy earlier this year, reshaping our portfolio to accelerate growth was our highest priority,” said Steve Rendle, President and Chief Executive Officer of VF in the statement, adding, “This acquisition combines two great companies and a group of iconic brands to create a global leader in workwear with approximately 1.7 billion dollars in annual revenue. We look forward to welcoming Williamson-Dickie and its 7,000 dedicated employees to the VF family.”

VF raises FY17 and 2021 outlook on Williamson-Dickie merger

For 2017, revenue is now expected to reach 11.85 billion dollars, up 3.5 percent on a reported and 4.5 percent currency neutral, and includes about a 200 million dollar contribution from Williamson-Dickie. This compares to the previous expectation of 11.65 billion dollars, a 2 percent increase on a reported and 3 percent currency neutral.

Gross margin is now expected to reach 49.5 percent, versus the previous expectation of 49.8 percent, and includes the impact of Williamson-Dickie. Excluding the impact of Williamson-Dickie, gross margin is still expected to be 49.8 percent and includes about a 70 basis point negative impact from changes in foreign currency.

Earnings per share is now expected to be 2.96 dollars, versus the previous expectation of 2.94 dollars, and includes about a 0.02 dollar contribution from Williamson-Dickie. Accordingly, EPS is expected to decline approximately 1 percent on a reported basis, up at a mid-single-digit percentage rate currency neutral compared to 2016 adjusted EPS of 2.98 dollars.

Revenue through 2021 is now expected to grow at a five-year compounded annual growth rate (CAGR) between 5 percent and 7 percent to more than 15 billion dollars, versus the previous expectation of a 4 percent to 6 percent five-year CAGR. Williamson-Dickie is expected to contribute more than 1 billion dollars of revenue by 2021.

Earnings per share is now expected to grow at a five-year CAGR between 11 percent and 13 percent to more than 5 dollars, versus the previous expectation of a five-year CAGR between 10 percent and 12 percent. Williamson-Dickie is expected to contribute more than 0.25 dollar by 2021.

On a trailing 12-month basis, Williamson-Dickie generated approximately 875 million dollars of revenue, it added. Brands under Williamson-Dickie umbrella include Dickies, Workrite, Kodiak, Terra, and Walls. These brands will join VF’s current workwear offerings of Wrangler RIGGS Workwear, Timberland PRO, Red Kap, Bulwark, and Horace Small. Upon closing the deal, the company said, Williamson-Dickie will become part of VF’s imagewear coalition and Philip Williamson, Chief Executive Officer of Williamson-Dickie will remain with the company, headquartered in Fort Worth, Texas.

Picture:Dickies press room