VF Corp. on Tuesday completed its $2.3 billion acquisition of The Timberland Co., and appointed Patrik Frisk as the unit’s president, succeeding former head Jeff Swartz.
With VF paying $43 a share, Swartz’s Class A and Class B shares will translate into nearly $89 million and he would be in line for a $37.2 million golden parachute payment, based on the merger agreement filed with the Securities and Exchange Commission last month. Sidney Swartz, Jeff’s father and the company’s former chairman, would receive $324.2 million and the family trust would get $150.4 million. The Swartz family controlled all of the Class B voting stock of the firm while the father and son collectively owned 5.6 percent of the Class A common shares.
Swartz, who has led Timberland as president and chief executive officer since 1998 and has spent 25 years with the firm founded by his grandfather, and who has been a consistent voice in the apparel-footwear universe for social responsibility and the fight against climate change, wasn’t available to comment on his plans Tuesday.
VF ceo Eric Wiseman contacted Timberland about a possible deal in December, according to the SEC filing. An acquisition for $40 a share was discussed as early as January. Although the $43-a-share price was first discussed in March, talks broke down the following month over diligence issues but resumed in May. The deal was announced on June 13.
Also departing Timberland Tuesday were Carrie Teffner, vice president and chief financial officer, and Danette Wineberg, vice president, general counsel and secretary. Swartz, Teffner and Wineberg were all based at Timberland’s Stratham, N.H., headquarters, to which Frisk will relocate.
Mark Satkiewicz, president of Timberland’s Smartwool unit, will stay on as president of Smartwool Americas and continue to work from the operation’s offices in Steamboat Springs, Colo.
Timberland becomes part of VF’s Outdoor and Action Sports Coalition and is expected to add $700 million to VF’s 2011 revenues and, including acquisition-related costs, 25 cents a share to VF’s earnings. Timberland had 2010 net income of $96.6 million and revenues of $1.43 billion, representing increases of 70.6 percent and 11.2 percent, respectively, over the prior year. Footwear accounted for 72.5 percent of last year’s revenues, or about $1 billion, versus 25.8 percent in apparel and accessories, about $370 million, and 1.7 percent in royalty and other income.
“With over half its revenues coming from international markets, Timberland is already well positioned as a global brand,” said Karl Heinz Salzburger, group president of VF International. “We look forward to leveraging VF’s platforms in both Europe and Asia to drive both the Timberland and Smartwool businesses to new heights.”
Frisk, who has been president of VF’s Outdoor and Action Sports unit in Europe, the Middle East and Africa since 2009, and Satkiewicz will report to Steve Rendle, group president of VF Outdoor and Action Sports Americas. Richard O’Rourke will be responsible for Timberland in Europe, the Middle East, Africa and Asia in his capacity as senior vice president, international, reporting to Salzburger.
Carden Welsh, senior vice president and chief administrative officer of Timberland, will stay through the end of the year and serve as an adviser to Rendle and Frisk.
VF’s 2010 revenues were $7.7 billion and, according to guidance provided in July, this year are expected to reach $9.1 billion to $9.9 billion, excluding Timberland volume.
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