Saucony Incb (NASDAQ:SCNYB)
Historical Stock Chart
From Jul 2019 to Jul 2024
![Click Here for more Saucony Incb Charts. Click Here for more Saucony Incb Charts.](/p.php?pid=staticchart&s=N%5ESCNYB&p=8&t=15)
The Stride Rite Corporation (NYSE: SRR) today announced
that it has entered into a definitive agreement to acquire Peabody,
Massachusetts-based Saucony, Inc. (NASDAQ: SCNYA/SCNYB), a leader in
performance running shoes. With approximately $167 million in global
sales in 2004, Saucony will significantly extend the range of Stride
Rite's nationally recognized footwear brands.
Under the terms of the agreement, approved unanimously by the
Boards of both companies, Saucony shareholders will receive $23.00 in
cash for each Saucony share. The transaction value is approximately
$170 million based on the current number of shares of Saucony's common
stock outstanding and net option value. Existing cash at Saucony
brings the net transaction value to approximately $140 million.
"We are delighted to add Saucony to our portfolio of nationally
recognized brands in a transaction we expect to be accretive in 2006
and beyond," said David M. Chamberlain, Stride Rite's chairman and
chief executive officer. "Saucony is a well-known technical brand with
loyal customers and solid growth prospects. This transaction combines
two leading footwear companies with strong balance sheets and cash
flows, similar corporate cultures, and shared roots in the greater
Boston area dating back to the early 1900s."
Chamberlain continued, "Saucony is an ideal brand for take-down
sales to the children's market, where performance footwear constitutes
approximately 50% of total sales for children ages nine and under.
Acquiring Saucony will provide an entree for Stride Rite in the
growing athletic specialty and sporting goods channels, adding greater
channel balance to Stride Rite's sales. Additionally, we expect that
Stride Rite's strength in department stores and national chain
accounts will help Saucony expand to its full potential. The
acquisition will double our international sales and provide critical
mass for growth of all of our brands in Europe and worldwide. Saucony
will also enhance Stride Rite's athletic development, sourcing
capabilities and leverage for our Stride Rite, Tommy Hilfiger and
Sperry Top-Sider brands. We look forward to welcoming the talented
Saucony employees to our Stride Rite family."
John H. Fisher, Saucony's president and chief executive officer,
said, "We are very pleased to enter into this agreement. Stride Rite's
and Saucony's complementary strengths will provide a stronger platform
for growth and profitability."
Combining Stride Rite's $558 million in 2004 sales with Saucony's
$167 million in 2004 sales will create a company with pro forma
combined revenues of approximately $725 million. The acquisition is
expected to be accretive to Stride Rite's earnings and cash flow in
2006 before one-time costs, with significant cost savings through
reduced public company and executive costs, and other operational
synergies. Annual cost synergies of approximately $6-8 million are
expected to be fully realized by fiscal 2007. Stride Rite intends to
finance the acquisition with cash on hand, Saucony's existing cash of
approximately $30 million, and borrowings under a new credit facility
led by Bank of America, N.A. Stride Rite will be conservatively
leveraged at less than two times cash flow, and is expected to
generate significant free cash.
The transaction is expected to close in the summer of 2005 and is
subject to regulatory approval, approval by the holders of at least
two-thirds of Saucony's Class A shares and the holders of at least
two-thirds of Saucony's Class A and B shares voting together as a
single class, and other customary closing conditions. Certain of
Saucony's senior executives and their affiliates representing
approximately 49% of Saucony's Class A common stock and 25% of
Saucony's combined Class A and Class B shares have agreed to vote in
favor of the merger. Stride Rite has requested that John Fisher serve
as a consultant to the company for approximately one year following
completion of the transaction.
Lane, Berry & Co. International, LLC acted as financial advisor to
Stride Rite in connection with this transaction and rendered a
fairness opinion to Stride Rite's Board of Directors. Goodwin Procter
served as legal advisor to Stride Rite.
Stride Rite will hold a conference call and webcast today at 10:30
a.m. EDT to discuss the transaction. Interested parties can dial
888-694-4769 (within the U.S.) or 973-935-8505 (outside the U.S.) or
go to www.vcall.com/CEPage.asp?ID=92282.
About Stride Rite
Headquartered in Lexington, MA, The Stride Rite Corporation is an
NYSE company with approximately $558 million in 2004 sales that
markets the leading brand of high-quality, non-athletic children's
shoes in the U.S. Other footwear products for children and adults are
marketed by the Company under well-known brand names, including Stride
Rite, Keds, PRO-Keds, Sperry Top-Sider, Tommy Hilfiger and
Grasshoppers. Information about the Company is available on our
website - www.strideritecorp.com. Information about the Company's
brands and product lines is available at www.striderite.com,
www.keds.com, and www.sperrytopsider.com.
About Saucony
Saucony designs, develops and markets performance-oriented
athletic footwear, athletic apparel and casual leather footwear. Its
principal products are:
-- technical running, walking, cross-training and outdoor trail
shoes and athletic apparel, which the company sells under the
Saucony brand name;
-- technical running shoe models from the early 1980s, which the
company reintroduced in 1998 as Saucony "Originals", its
classic footwear line;
-- athletic apparel, which the company sells under the Hind brand
name; and
-- shoes for coaches and officials, cleated football and
multi-purpose footwear and casual leather walking and
workplace footwear, which the company sells under the
Spot-bilt brand name.
Saucony's products are sold in the United States at more than
5,500 retail locations and at its 21 factory outlet stores. Outside
the United States the company's products are sold in 53 countries
through 24 independent distributors located throughout the world and
through the company's subsidiaries located in Canada, The Netherlands
and the United Kingdom and at the company's two factory outlet stores
in Canada. For more information, visit www.saucony.com.
Safe Harbor
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995: This announcement includes forward-looking
statements which reflect Stride Rite's current views with respect to
the future events or financial performance discussed in the release,
based on management's beliefs and assumptions and information
currently available. When used, the words "believe", "anticipate",
"estimate", "project", "should", "expect", "appear" and similar
expressions, which do not relate solely to historical matters identify
forward-looking statements. These forward-looking statements, which
include statements regarding the expected benefits of the acquisition
of Saucony and the impact of the acquisition on Stride Rite's
financial results, are subject to risks, uncertainties and assumptions
and are not guarantees of future events or performance, which may be
affected by known and unknown risks, trends and uncertainties. Should
one or more of these risks or uncertainties materialize, or should our
assumptions prove incorrect, actual results may vary materially from
those anticipated, projected or implied. Factors that may cause such a
variance include, among others: the inability to fully realize the
anticipated benefits from the acquisition of Saucony; the challenges
of achieving the expected synergies; the possibility of incurring
costs or difficulties related to the integration of the businesses of
Stride Rite and Saucony; the opening of new stores may be delayed; the
volume of anticipated sales may decline; revenues from new product
lines may fall below expectations; the launch of new product lines may
be delayed; new retail concepts may not achieve expected results;
general retail sales trends may be below expectations; current license
agreements may be terminated; consumer fashion trends may shift to
footwear styling not currently included in our product lines; our
retail customers, including large department stores, may consolidate
or restructure operations resulting in unexpected store closings; and
additional factors discussed from time to time in our filings with the
Securities and Exchange Commission. We expressly disclaim any
responsibility to update forward-looking statements.