Stride Rite Corporation, the American children’s shoe manufacturer and retailer that owns also Sperry Topsider, Keds, Pro Keds and the Tommy Hilfiger license, plans to extend the Saucony sports footwear brand into the children’s and lifestyle sectors. Few synergies are expected on the international front, where Stride Rite and Saucony are both relatively weak. K-Swiss and other potential candidates to Saucony’s takeover would have been able to bring more synergies in terms of foreign sales. Saucony closed its European office in Germany more than one year ago, but it still has an office in Holland.
Stride Rite is paying $23 per share for Saucony, representing a 19 percent premium over the stock’s recent trading price. That means a cash payment of $170 million, or rather $140 million considering that Saucony comes with $28.7 million in cash and no debt. That price is equal to about 6.7 times earnings before depreciation and amortization (Ebitda) after taking out almost $2 million in salaries for the top two executives.
Many other American athletic footwear brands – AND 1, Brooks, Reef and Vans – have changed hands recently, as duly reported in our sister publication, Sporting Goods Intelligence Europe. Saucony, which specializes in running, was the only other major American sports footwear brand that was looking for a larger company to swallow it (more in SGI Europe).