Adidas Group announced early Nov. 3 that it intends to acquire outdoor and climbing footwear brand Five Ten for $25 million.
The share purchase agreement, which is expected to close within the next few weeks, includes Five Ten (www.fiveten.com) and its sister company Stealth Rubber (www.stealthrubber.com), the sticky rubber technology featured on the outsoles its shoes. The purchase price is “dependent on Five Ten achieving certain performance measures over the next three years,” officials said in a press release.
Germany-based Adidas made the announcement along with its third-quarter 2011 earnings, which rose in revenue and profit.
Privately-held Five Ten is based in Redlands, Calif., and was founded by owner Charles Cole in 1985. The company employs 37 people and annual net sales are expected to be approximately $22 million, excluding distributor business in Japan and Korea. Five Ten will maintain its U.S. production of rock shoes, Guide Tennies and Yosemite Jeans with plans to bring more production back to the United States, officials said.
Outdoor industry experts told SNEWS that Five Ten’s greatest value for Adidas lies in its Stealth Rubber technology. The rubber, developed by Cole, creates greater friction with surfaces by interlocking with surface textures better than normal rubber. The effect is more stickiness with the surface, key for climbers on steep rock, leading Five Ten to become a leading climbing footwear brand. The technology is also known for its durability – in effect a hard rubber with great interlocking capabilities.
The Stealth Rubber technology has been shared through licenses by Five Ten — to L.L. Bean in the 1990s, and since 2002, to Chaco, Simms and Vision Fly Fishing. Vasque also licensed the rubber at a point.
For Adidas, the purchase of Five Ten could also provide further inroads into the outdoor industry. The German footwear and sportswear giant re-launched its outdoor segment, Adidas Outdoor, in Europe in 2009 and then in the United States in January 2011 with a line of outdoor focused apparel and footwear.
Adidas is bullish on the outdoors, company officials said in its press release.
“Adidas Group expects sales in the outdoor segment to exceed EUR 500 million (USD $685 million) by 2015 based on organic growth. Through the acquisition of Five Ten, the Adidas Group will be even better positioned towards the goal to become a leading player in the outdoor market.”
“This acquisition underscores our clear commitment to the outdoors,” Adidas senior vice president Rolf Reinschmidt said, “and our ambition to play a leading role in the outdoor industry going forward.”