North Carolina-based Kontoor Brands, the parent company of lifestyle apparel brands Wrangler and Lee, has entered a definitive agreement to acquire global outdoor and workwear brand Helly Hansen.
The acquisition from Canadian Tire will see Kontoor Brands taking over 100% ownership of Helly Hansen for total gross proceeds of $1.27bn, subject to closing adjustments.
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Helly Hansen offers high-performance apparel and gear for professionals and outdoor enthusiasts. Its products are available in Canada in stores such as Canadian Tire, SportChek and Mark’s.
The transaction will accelerate Kontoor’s growth trajectory, leveraging its existing strengths in product innovation and market expansion.
The addition of Helly Hansen is expected to enhance Kontoor’s presence across multiple categories and channels, while also increasing its market share in the outdoor and workwear sectors on a global scale.
Kontoor Brands president, CEO and chairman Scott Baxter stated: “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.
“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.”
Helly Hansen stands to benefit from Kontoor’s robust multi-brand operating platform and deep management expertise in the outdoor and workwear categories.
Kontoor will finance the transaction through excess cash on hand and new debt financing, with an anticipated net leverage of less than three times trailing 12 months’ pro forma adjusted EBITDA [earnings before interest, taxation, depreciation and amortisation] at closure.
Kontoor anticipates that the acquisition will yield strong financial returns and contribute meaningfully to earnings and cash flow by 2025, not including potential synergies.
Over time, additional synergies are also expected through operational efficiencies and improved net working capital management.
The transaction has received approval from the board of directors of Kontoor Brands and will complete in the second fiscal quarter of 2025.
Helly Hansen will use the proceeds from the deal for debt reduction, share repurchase and investments aimed at enhancing customer experience and driving growth in its core Canadian retail business.
