Adidas to sell Rockport business to new entity
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Sports goods giant Adidas said that it has entered into a definitive agreement to sell its Rockport business to a new entity formed by Berkshire Partners and New Balance for a total consideration of 280 million dollars, most of which will be paid in cash with the remainder comprised of notes.
According to the company, New Balance will contribute its Drydock business to the new entity which will create a leading collection of global footwear brands including Rockport and Drydock's Aravon, Dunham and Cobb Hill brands. The company expects the transaction to be completed later in 2015.
As a result of the transaction, the Adidas Group will record a non-operational negative P&L impact in a double-digit million Euro amount, which will be reported in discontinued operations as part of the company's 2014 results.
Separately, the company said that it reached its updated top- and bottom-line financial targets on an underlying basis. Full year 2014 net income attributable to shareholders reached the earnings target of around 650 million euros, excluding goodwill impairment losses and the impact of the Rockport divestiture.
Adidas Group CEO Herbert Hainer said, "Rockport is a brand that has performed well over the last years. However, our focus is clearly on sport and operating a brand portfolio with a clear agenda to unleash the potential of athletes and inspire consumers to live active lives. The brown shoe category is not core to this strategy and the sale of Rockport will allow us to reduce complexity and pursue our target consumer more aggressively with the adidas, Reebok and TaylorMade brands."
The transaction is expected to be completed later in 2015, subjected to customary closing conditions. Rockport Company, LLC, based in Massachusetts, is a designer, developer, manufacturer, distributor and retailer of men's and women's footwear, sold through a multi-channel distribution network. New Balance will contribute its Drydock business to the new entity, creating a major collection of global footwear brands including Rockport and Drydock's Aravon, Dunham and Cobb Hill brands.
(dpa-AFX)