VF Corp. announced this morning that it is making a major move in workwear by acquiring Williamson-Dickie Mfg. Co., which owns the Dickies brand among others.
VF will pay $820 million in cash for the privately-held company. In the past 12 months, Williamson-Dickie recorded revenue of $875 million. Williamson-Dickie is expected to reach $1 billion in revenue by 2021.
Dickies and the other brands in the Williamson-Dickie portfolio will merge with VF’s workwear division, which includes Wrangler, Timberland Pro and others. The acquisition will double VF’s workwear business.
VF has vowed to be active portfolio managers, and has sold both its contemporary brands and its licensing business recently, and hinted more changes are likely.
The company sees opportunity in the fragmented, $30 billion workwear industry, which VF described as large, growing and under-penetrated. Large competitors in the sector include Carhartt, Red Wing and Wolverine.
VF expects synergies with VF’s operational infrastructure can help to improve Williamson-Dickie’s profitability going forward.
As a result of the acquisition, VF now expects company revenue to reach $15 billion by 2021, and increase of $1 billion from the previous target.
VF’s stock price is trading 1.5% higher this morning to $62.48.