Canadian Tire announces sale of Helly Hansen to Kontoor Brands

Canadian Tire Corporation, Limited (TSX: CTC) (TSX: CTC.A), CTC or the Company) has announced that it has signed a definitive agreement to sell its Helly Hansen business to Kontoor Brands, Inc. (NYSE: KTB, Kontoor) for total gross proceeds of $1,276 million, subject to closing adjustments. The transaction reflects CTC’s increasing focus on its Canadian retail portfolio.

Helly Hansen is an iconic global brand which designs and develops products used by professionals and outdoor enthusiasts around the world. Its high-performance apparel and gear are sold worldwide, including in Canadian Tire, SportChek and Mark’s stores in Canada.

“As our strategy becomes more singularly focused on great Canadian retail, it is time to pass this iconic brand into global hands,” said Greg Hicks, President and CEO, Canadian Tire Corporation. “For six years, we have been proud stewards of Helly Hansen, expanding its popularity and foothold into more parts of the world – increasing sales, brand awareness and elevating value in the process. This divestiture unlocks that value for our company and shareholders.”

CTC and Kontoor anticipate a smooth transition for employees, customers and partners.

“As we shift from brand owner to brand customer, we expect Helly Hansen’s world-class products to remain on our shelves and on the shopping lists of our customers. We are excited to see where Kontoor takes the brand next,” said Hicks. “We thank the Helly Hansen team and leaders for their exceptional work, and for sharing great lessons in sourcing, brand design, and high-performance products with our CTC experts.”

“We are thrilled to welcome the Helly Hansen team into Kontoor Brands and to build a future together that creates significant value for all our stakeholders. Given our global platform and proven track record of operational excellence in owning brands rooted in heritage, quality, authenticity and innovation, Kontoor Brands is uniquely positioned to partner with Helly Hansen management to scale and elevate the business globally,” said Scott Baxter, President, Chief Executive Officer and Chairman of Kontoor Brands. “The acquisition of Helly Hansen is the perfect fit for our strategy to evolve and expand our portfolio of brands, accelerate growth, and deliver long-term value for our shareholders. I want to thank the Canadian Tire and Helly Hansen teams for the partnership in this process. I couldn’t be more excited for the future of Kontoor Brands and our stakeholders.”

Joe Alkire, Kontoor Brands’ Executive Vice President and Chief Financial Officer added, “Our strong balance sheet and operating cash flows provide us with significant capital allocation optionality, which we are employing in the acquisition of Helly Hansen. The acquisition will accelerate our growth and earnings potential while enhancing our already strong cash flow profile. We have deep management expertise in the attractive outdoor and workwear growth categories, and expect the addition of Helly Hansen to drive accretive returns to our existing TSR commitment, supporting strong and sustainable long-term value creation for all stakeholders.”