Columbia Sportswear Co. (COLM), a maker of jackets and other outerwear, agreed to acquire PrAna Living LLC for $190 million, adding yoga and rock-climbing clothing that’s designed to be environmentally sustainable.
Columbia is buying the brand from Steelpoint Capital Partners and other investors in a cash transaction, according to a statement today. PrAna, founded in 1992, is expected to top $100 million in sales this year, with an operating margin in the low double-digits, Columbia said.
The move will help Columbia lessen its reliance on winter clothes and target socially conscious, “free-spirited” consumers, according to the statement. PrAna, based in Carlsbad, California, has five U.S. stores, as well as a direct-sales operation and relationships with specialty retailers. The transaction is slated to close in the second quarter.
“PrAna fits Columbia’s strategic priorities to expand into categories that appeal to complementary consumer segments, reduce our dependence on cold-weather products, and leverage Columbia’s global operational platforms to expand across key geographic markets,” Tim Boyle, chief executive officer of Portland, Oregon-based Columbia, said in the statement.
PrAna, which sells yoga leggings, stretch jeans and shirts woven with organic cotton, is expected to contribute about $55 million in incremental sales to Columbia in 2014. PrAna’s sales grew more than 30 percent annually between 2010 and 2013, according to the statement. The transaction is expected to bring $4 million in one-time fees, as well as about $9 million in integration expenses this year, Columbia said.
Next year, PrAna’s sales are expected to grow at a double-digit rate, with operating margins in the low teens, excluding one-time costs of $5 million. The deal will boost Columbia’s earnings in 2015, the company said.
JPMorgan Chase & Co. advised Columbia on the transaction, while Wachtell, Lipton, Rosen & Katz supplied legal counsel.
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