Rocky Brands Inc., best known for its rugged work and military boots, has added a new portfolio of labels to its roster.
The Nelsonville, Ohio-based company — parent to Rocky, Georgia Boot and Durango — announced today it will acquire the performance and lifestyle footwear business from Honeywell International Inc. for $230 million in cash and debt. The purchase includes The Original Muck Boot Company, as well as the Xtratuf, Servus, Neos and Ranger boot brands.
Rocky financed the deal with cash on hand, plus an $80 million senior secured asset-backed credit facility that bears interest at LIBOR plus 1.50%, and a $130 million senior secured term loan that bears interest at LIBOR plus 7%.
The acquisition has been approved by Rocky’s board of directors and is expected to close in the first quarter of this year.
Jason Brooks, president and CEO of Rocky Brands, emphasized that the Honeywell portfolio is a strong complement to the company’s existing business. “We will greatly enhance our powerful portfolio of footwear brands and significantly increase our sales and profitability,” he said in a statement. “We’re acquiring a well-run business with a corporate culture and a customer base similar to ours, which provides meaningful growth opportunities within our existing categories as well as an entrée into new market segments.”
He added that the Honeywell labels, which have an expertise in all-weather footwear, will help Rocky expand its wholesale coverage and reach new consumers. “At the same time,” Brooks said, “we plan to leverage Rocky’s advanced fulfillment capabilities to improve distribution of the new brands to wholesale customers and accelerate direct-to-consumer penetration.”
Seven executives from the Honeywell footwear business have agreed to join the Rocky team, including Craig Reingold, who served as president of the division. The employees were granted stock options totaling 25,000 shares, to be purchased on the date of closing.
In a statement, Reingold said, “This transaction will bring together many strong, beloved brands. As we look to the future, the combined entities provide our passionate associates with greater opportunities to serve our accounts and consumers who have come to love our brands.”
Rocky Brands is one of the few companies to emerge from 2020 in a stronger position. After seeing revenue fall during the coronavirus shutdowns at the beginning of the year, the company reported that net sales rebounded in Q3, rising 15.8% to $77.8 million, compared with $67.2 million in the same period in 2019. The increase was driven by gains in both its wholesale and retail divisions, offset slightly by a small dip in its military segment.
Following the announcement this morning, shares of Rocky Brands spiked more than 15%, and were trading at $35.44 as of press time.