In a union of two retailers focused on the western lifestyle, Boot Barn Holdings Inc. has agreed to acquire Sheplers Inc. for $147 million in cash.
Shares of Boot Barn jumped more than 10 percent Monday on the news.
Sheplers has 25 retail locations and in the 12 months ended March 28 had net sales of $157 million, including $66 million in e-commerce sales, and adjusted earnings before interest, taxes, depreciation and amortization of $14.9 million. Boot Barn’s sales in the fiscal year ended March 28 rose 16.4 percent to $402.7 million.
Expected to close by the week of June 29, the purchase of Sheplers would increase Boot Barn’s e-commerce penetration to 15 percent from 4 percent. The acquisition would be financed through third-party debt.
The Sheplers stores would be rebranded as Boot Barn stores.
“The acquisition of Sheplers enhances Boot Barn’s position as the largest, fastest-growing western and work chain in the United States and creates the leading omnichannel business in the industry,” said Jim Conroy, chief executive officer of Irvine, Calif.-based Boot Barn.
Bob Myers, ceo of Sheplers, said, “Our ability to grow the largest online business in the industry started with building upon our loyal customer base from our long-standing catalogue format. Joining the Boot Barn family will allow Sheplers to provide value to a larger customer base through both in-store and online channels and provide more opportunities for many of our associates both in the field and in our corporate office.”
The acquisition is expected to generate $6 million to $8 million in annual synergies and be immediately accretive to earnings, including one-time transaction and integration expenses estimated to be about $14 million. Once fully integrated in the calendar year 2016, accretion is expected to rise to about 10 percent.
Boot Barn went public in October, raising $80 million. Prior to its IPO, it acquired RCC in 2012 and Baskins in 2013.
Shares of Boot Barn rose $2.60, or 10.6 percent, to $27.06 on the New York Stock Exchange Monday after setting a 52-week high of $27.68 in midday trading.