Monday 9th April 2018
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Kiwi merino wool clothing maker Icebreaker Holdings was sold to US apparel giant VF Corp for $288 million in a competitive tender process, Overseas Investment Office documents show.
North Carolina-based VF Corp withheld the price paid when it announced the deal was completed with OIO approval. The acquisition added Icebreaker to VF's Smartwool brand, which the US firm said would position it as a global leader in merino wool and natural fibres.
The OIO granted consent for the deal on March 13, putting a $288 million price tag on the takeover. Icebreaker's shareholders sought a tie-up with "an established international entity or group for global market access, logistics and management opportunities" to "fully realise Icebreaker's growth potential" and picked VF as its preferred buyer after a competitive tender process, a summary of the decision said.
Pencarrow Private Equity is the biggest shareholder with a 38 percent stake it bought three years ago, followed by founder Jeremy Moon who directly holds 6.4 percent and indirectly owns 22.5 percent via Moon Comm with his ex-wife Sarah Catherall. Stephen Tindall's K One W One owns 9.4 percent.
The foreign investment screening body was satisfied "the individuals who will control the investment have the relevant business experience and acumen and are of good character," and that they "demonstrated financial commitment to the investment," the summary said.
Icebreaker had annual sales of $220 million in the last financial year, of which 86 percent were from overseas markets, and is expected to immediately add to VF's earnings.
NYSE-listed VF Corp has a market capitalisation of around US$29.5 billion and its portfolio includes The North Face, Timberland, SmartWool, Vans, Wrangler and Lee. The company lifted 2017 revenue 7 percent to US$11.8 billion, generating a profit of US$615 million. It previously said the "purchase price is not material to VF."
Icebreaker signed a 10-year, $100 million supply contract with New Zealand merino wool growers a week after the deal was first announced in November, with the clothing company paying a premium to recognise grower loyalty and let the firm use farm imagery and storytelling in its global marketing efforts.
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