Japanese retailer buying Lacrosse/Danner footwear for $138 million
Tokyo-based ABC-MART Inc. said it had signed a definite agreement to acquire Lacrosse Footwear Inc. (Nasdaq: BOOT) for $20 a share, or roughly $138 million. Lacrosse, which also owns the Danner brand, plans to keep its operations and factory in Portland, Ore., officials said.
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Lacrosse Footwear Inc., parent to its namesake and Danner brands, is being sold to a Japanese footwear retailer for approximately $138 million.
Tokyo-based ABC-MART Inc. said it had signed a definite agreement to acquire Lacrosse (Nasdaq: BOOT) for $20 a share. The purchase represents an 82 percent premium over the company’s stock price before the announcement. The transaction is expected to close in the third quarter 2012.
Officials said LaCrosse Footwear and its Danner factory would continue operations in Portland, where the company employs about 300 of its 400 workers. LaCrosse was founded in Wisconsin in 1897, purchasing Portland-based Danner Boots (founded in 1932) in 1994 and moving the combined company there in 2001.
“Together, we will continue to leverage our world-class manufacturing facility in Portland, Ore. to meet growing demand for American-made products around the world, Lacrosse President and CEO Joseph Schneider said in a press release.
How much the deal could benefit Lacrosse and Danner’s outdoor footwear business remains to be seen, but officials seemed to focus more on the brands’ lifestyle products.
“In particular, the combined entity will be well-positioned to strengthen LaCrosse Footwear’s lifestyle and casual footwear business, by jointly developing and producing footwear with competitive quality, pricing, and design, and drive the geographic expansion of LaCrosse and Danner branded footwear, particularly in Japan, South Korea, Taiwan, Hong Kong, and the rest of Asia, as well as in Europe,” ABC-MART President Minoru Noguchi said.
Schneider said the company would remain committed to the outdoor market, however. “We see exciting opportunities in our newer lifestyle and casual offerings, as well as a solid financial and strategic commitment to support our ongoing business serving the work and outdoor markets.”
In it’s most recent earnings, Lacrosse and Danner reported sales up 32 percent to $33.3 million for the first quarter 2012, largely due to an increase of its work and military boot sales, and its outdoor footwear managed a gain too despite the warm winter.
Lacrosse sales to the outdoor market rose 2 percent to $9.3 million for the first quarter, compared to a year ago. While officials said that the warm winter negatively impacted sales, the company saw a growing demand for its new hiking and lifestyle footwear.
Lacrosse’s work and military boots sales jumped 50 percent to $24 million, “reflecting fulfillment of a previously announced U.S. military order and growing demand from a variety of non-military government and other niche work markets” officials said.
The company swung to a first-quarter profit of $600,000 versus a loss of $700,000 a year ago.
For its most recent full year, Lacrosse and Danner reported sales of $131.3 million in 2011, down nearly 13 percent. It’s yearly profit slipped from $6.9 million in 2010 to $3 million in 2011.