Exhibit 99.1
VF TO ACQUIRE VANS, INC. FOR $20.55 PER SHARE IN CASH
Greensboro, NC April 27, 2004 VF Corporation (NYSE: VFC), the worlds largest apparel company, announced that it has signed a definitive merger agreement to acquire Vans, Inc. (NASDAQ: VANS). The acquisition would launch VF into the large and growing action sports market with one of the industrys leading lifestyle brands. Vans sales in fiscal 2003 were $330 million, and the company has indicated that it expects sales of approximately $346 to $349 million in fiscal 2004, which ends May 31. The transaction, which is expected to close early in VFs third quarter, is expected to be neutral to earnings per share in 2004 and slightly accretive in 2005.
A New Growth Engine
Mackey J. McDonald, chairman and chief
executive officer of VF, said, We are making growth happen, and were
doing it with a powerful brand that resonates strongly with its core teen consumer
base. Vans is the original
action sports brand, the industry leader in brand awareness. The acquisition
will give us a dynamic new brand to add to our growing Outdoor portfolio, provide
us with expertise in footwear and other new products and offer clear opportunities
for continued top line growth. We expect that Vans sales could reach $500 million in the next three to five years, with the potential to meet VFs
operating margin and return on capital targets.
"The combination with VF represents a great opportunity for the VANS brand to become a leader in both footwear and apparel and our Board of Directors is certainly pleased with the terms of this transaction, which it believes brings great value to the Vans shareholders," said Gary H. Schoenfeld, President and CEO of Vans. "VF has a compelling strategy to leverage its global resources through the acquisition of market leading lifestyle brands. Vans clearly fits their model, having established a proprietary position in the youth market over the past 38 years. I believe this transaction is a testament to the passion and commitment of our team and a strong endorsement of what we have accomplished."
Vans, which will become part of VFs Outdoor coalition reporting to Eric Wiseman, will continue to be based in Santa Fe Springs, California.
Said Eric Wiseman, chairman of VFs Outdoor and Sportswear Coalitions, Vans is an excellent company managed by a great team that is completely connected to their consumer. By focusing on the whole action sports industry, the company has grown beyond its roots in skateboarding, and through events like the Vans Warped Tour and the Vans Triple Crown series, it has a created a marketing platform to stay connected to its core consumers. Our first priority is to help the management team there implement their apparel and retail growth strategies. Well leverage VFs apparel expertise and global presence to deliver the next wave of growth for Vans".
Terms and Other Information
Pursuant to the merger agreement, VF will pay Vans shareholders $20.55 per share in cash. The total cost of the shares, including the cashout of stock options, is approximately $396 million.
The boards of directors of both companies have approved the merger. The merger is subject to Vans shareholder approval, receipt of customary government approvals and other customary conditions.
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April 27, 2004
VF will finance the acquisition initially through available cash and short-term commercial paper borrowings. VF anticipates that with any required borrowings the resulting ratio of debt to total capital would remain below its long-term target of 40%.
The financial adviser to VF was Wachovia Securities and the financial advisor to Vans was Goldman Sachs.
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April 27, 2004
Conference Call Webcast
The management of both companies will
be available to discuss this transaction with investors during a conference
call today at 1:30 p.m. EDT, prior to VFs first quarter earnings conference
call scheduled for 2:00 p.m. EDT. Interested parties should call 800-240-4186,
domestic, or 303-262-2194, international to access both calls. You may also
access this call via the Internet at www.vfc.com.
A replay of todays call will be available through May 11 and can be accessed by dialing 800 405-2236 domestic, and 303 590-3000, international. The pass code is 578390. A replay can also be accessed at the Companys web site at www.vfc.com.
Cautionary Statement on Forward-looking Statements
Certain statements included in this
release are "forward-looking statements" within the meaning of the federal securities laws. Management cautions that forward-looking statements are not guarantees and that actual results
could differ materially from those expressed or implied in the forward-looking statements. Important risk factors that could cause the actual results of operations or financial condition of the Company to differ include, but are not limited to, the
overall level of consumer spending for apparel; changes in trends in the segments of the market in which the Company or Vans competes; competitive conditions in and financial strength of our or Vans customers or our or Vans suppliers;
actions of competitors, customers, suppliers and service providers that may impact the Companys or Vans business; the Companys ability to integrate Vans and any other new acquisitions successfully; the Companys ability to achieve
expected sales and earnings growth from Vans and any other new acquisitions; the Companys
ability to complete its planned divestitures; terrorist actions; and the impact
of economic and political factors in the markets where the Company or Vans competes,
such as recession or changes in interest rates, currency exchange rates, price
levels, capital market valuations and other external economic and political factors
over which neither the Company nor Vans has any control. Investors are also directed to consider the risks and uncertainties discussed in documents filed by the Company or Vans with the Securities and Exchange Commission.
Certain Additional Information
Investors and security holders are urged to
read the proxy statement of Vans and any other relevant documents filed by
Vans with the SEC when they become available, as well as any amendments or
supplements to those documents, because they will contain important information.
Investors and security holders may obtain a free copy of documents filed with
the SEC at the SECs Internet web site at (www.sec.gov). Such documents
may also be obtained free of charge from Vans by directing such request to:
Vans, Inc., 15700 Shoemaker Avenue, Santa Fe Springs, California 90670, Attn:
Craig Gosselin or by calling (562) 565-8267.
Vans and its directors and executive officers and certain other persons may be deemed to be participants in the solicitation of proxies from the shareholders of Vans in connection with the merger. Information about the directors and executive officers of Vans and their ownership of and interests in Vans stock is set forth in the proxy statement for Vans 2003 Annual Meeting of Shareholders. Additional information regarding the interests of those participants may be obtained by reading the proxy statement regarding the proposed transaction when it becomes available.
About VF
VF Corporation is the worlds
largest apparel company and a leader in jeanswear, intimate apparel, sportswear,
workwear and daypacks. Its brands include Lee®, Wrangler®, Riders®, Rustler®, Vanity FVans®, Vassarette®, Bestform®,
Lily of France®, Nautica®
, Earl Jean®, John Varvatos®, JanSport®, Eastpak®, The North Face®, Lee
Sport®, Healthtex® and Red Kap®. VF
Corporations press releases,
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April 27, 2004
annual report and other information can be accessed through the Companys home page, http://www.vfc.com.
About Vans
Vans, Inc. is a leading branded lifestyle
company for the youth market. Vans reaches its 10 to 24 year-old target consumers
through the sponsorship of action sports such as skateboarding, snowboarding,
surfing and wakeboarding, and through major entertainment events and venues,
such as the VANS Triple Crown Series, the VANS Warped Tour®, the VANS World Amateur Skateboarding Championships, and the VANS High Cascade Snowboard Camp® ,located
on Mt. Hood. The Company operates 155
retail stores in the U.S. and Europe, and designs, markets and distributes active-casual
footwear, clothing and accessories, performance footwear for action sports snowboard
boots, strap snowboard boot bindings under its AGENCY brand, step-in snowboard boot bindings under its SWITCH® brand,
and outerwear worldwide. The Company also offers the PRO-TEC line of protective
helmets and pads through its subsidiary, Pro-Tec, Inc. Vans website is
www.vans.com and its news releases, SEC filings, and other investor information
can be accessed at www.vans.biz.
Contacts: | |
VF Corporation: | Cindy Knoebel, CFA |
VP,
Financial & Corporate
Communications |
|
VF Services, Inc. |
|
(336) 424-6189/(212) 841-7141 |
|
Vans, Inc.: | Chad Jacobs |
CO-CEO |
|
Integrated Corporate Relations, Inc. |
|
(203) 222-9013 |
|
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