Rocky Brands, Inc. Announces Completion of Acquisition of Leading Brand Portfolio From Honeywell Including the Original Muck Boot Company and XTRATUF

Rhea-AI Summary

Rocky Brands, Inc. (NASDAQ: RCKY) announced the completion of its acquisition of Honeywell's performance and lifestyle footwear business for $230 million. This acquisition includes well-known brands like The Original Muck Boot Company and XTRATUF. The acquired brands generated net revenue of $205 million in 2020 with an EBITDA of $24.5 million. The deal is expected to nearly double Rocky Brands' annual revenues, enhancing growth opportunities and stakeholder value.

Positive

• Acquisition of Honeywell's footwear business expected to nearly double annual revenues.
• The acquired brands generated $205 million in revenue and $24.5 million in EBITDA in 2020.
• CEO emphasizes strong growth potential and increased earnings power from new brands.

Negative

• Acquisition financing involves significant debt through an $80 million credit facility and a $130 million term loan.
• Risks associated with integration of the acquired business and potential disruptions.

Rocky Brands, Inc. (NASDAQ: RCKY) today announced that on March 15, 2021 it completed its previously announced acquisition of the performance and lifestyle footwear business of Honeywell International, Inc., including The Original Muck Boot Company and XTRATUF footwear brands for $230 million.

Jason Brooks, President and Chief Executive Officer of Rocky Brands, Inc., commented, “We are thrilled to have completed this transformative acquisition. The Original Muck Boot Company, XTRATUF, Servus, NEOS and Ranger brands are great additions to our existing portfolio while the total business nearly doubles the size of Rocky Brands’ annual revenues. We look forward to working closely with our newest team members to capitalize on the many opportunities we believe exist to drive strong growth, increased earnings power, and enhanced stakeholder value over the near- and long-term.”

For 2020, the acquired brand portfolio generated net revenue of approximately $205 million with EBITDA of approximately $24.5 million. The business grew in 2020 with performance accelerating throughout the year, culminating in strong top-line growth in the fourth quarter.

The purchase was funded with an $80-million senior secured asset-backed credit facility with Bank of America, N.A., a $130 million senior secured term loan facility with The Direct Lending Group of TCW Asset Management Company LLC, and cash on hand.

About Rocky Brands, Inc.

Rocky Brands, Inc. is a leading designer, manufacturer and marketer of premium quality footwear and apparel marketed under a portfolio of well recognized brand names including Rocky®, Georgia Boot®, Durango®, Lehigh®, and the licensed brand Michelin®.

Cautionary Statement Regarding Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain and involve potential risks and uncertainties. A number of factors could cause actual results to differ materially from these statements, including, but not limited to risks relating to the Company’s acquisition of the Honeywell footwear business, including risks inherent in the achievement of expected financial results, including sales, gross margins, earnings before interest, taxes, depreciation and amortization, and earnings per share, and cost synergies for the acquisition and the timing thereof; risks that the transaction may be disruptive to the Company or the acquired business or their respective management teams; the effect of closing of the transaction on the acquired business’s ability to retain and hire key personnel and maintain relationships with customers, suppliers and other third parties; risks related to integration of the acquired business with the Company and other factors. Additional information concerning other risks and uncertainties that could cause actual results to differ materially from that projected or suggested is contained in the Company’s filings with the SEC over the last 12 months, copies of which are available from the SEC or from the Company upon request. The Company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained in this press release or to reflect any changes in the Company’s expectations after the date hereof or any change in events, conditions or circumstances on which any statement is based, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210315005447/en/

FAQ

What was the value of Rocky Brands' acquisition of Honeywell's business?

Rocky Brands completed the acquisition for $230 million.

Which brands did Rocky Brands acquire from Honeywell?

Rocky Brands acquired The Original Muck Boot Company, XTRATUF, Servus, NEOS, and Ranger brands.

What financial impact is expected from the acquisition by Rocky Brands?

The acquisition is anticipated to nearly double Rocky Brands' annual revenues.

What were the 2020 revenues and EBITDA for the acquired brands?

The acquired brands generated approximately $205 million in revenue and around $24.5 million in EBITDA in 2020.

What financing was used for the acquisition of Honeywell's footwear business?

The acquisition was funded through a combination of an $80 million credit facility, a $130 million term loan, and cash on hand.