VF Corp. to Acquire Nautica

Nautica Enterprises Inc. (New York) has announced the signing of a definitive merger agreement to be acquired by VF Corp. (New York) in a deal worth about $585.6 million.

David Chu, Nautica vice chairman, will assume responsibility following the merger for the Nautica brand, overseeing global design, product development and marketing. “I'm excited to be joining forces with such a strong partner and I view this transaction as the best means of maximizing the full potential of the Nautica brand,” Chu said. “This year marks Nautica's 20th anniversary, and I view this transaction as a fitting way to celebrate both the longevity of the brand as well as its bright future. I'm personally looking forward to this new endeavor.”

VF has entered into a separate agreement with Chu to acquire his rights, including his right to receive 50 percent of the net royalty income from licensing the Nautica trademark. Under this agreement, VF will pay him $38 million upon the closing of the transaction and $33 million on each of the third and fourth anniversaries of the closing. Chu will also have the right to receive payments in each of the next five years in the event an annual gross royalty revenue threshold is exceeded.

VF, the world's largest apparel company — particularly in jeanswear, intimate apparel, playwear, workwear and daypacks — currently manufactures products under the Lee, Wrangler, Riders, Rustler, Vanity Fair, Vassarette, Bestform, Lily of France, Lee Sport, Healthtex, JanSport, Eastpak, Red Kap and The North Face brands.

“VF will gain a powerful lifestyle brand that extends across multiple product categories, including men's sportswear and jeanswear, in addition to a broad array of licensed categories including men's tailored clothing, dress shirts, accessories, women's swimwear, fragrances, eyewear, watches and home furnishings,” said chairman and ceo Mackey McDonald. “At the same time, Nautica will benefit from VF's superior supply chain, inventory and brand management capabilities.”