Wolverine World Wide Inc
), one of the leading designers, manufacturers and marketers of
branded footwear and apparel, priced its $375 million worth of
senior notes at 6.125%. Earlier this week, the company stated that
the debt offering will carry a guarantee of its certain domestic
subsidiaries, and is scheduled to mature in 2020.
Wolverine stated that the net proceeds from the sale of debt
would be around $367 million after meeting the expenses and initial
purchasers' discounts and will only be offered to the qualified
The company also stated that the proceeds from the offering will
be used to fund its acquisition of the Performance + Lifestyle
Group business (the "PLG Business") of
Collective Brands Inc
). Apart from this, the company intends to repay loans under its
credit facility with the amount.
Wolverine is focusing on enhancing its portfolio of brands, thus
the company announced the acquisition of Collective Brands'
Performance + Lifestyle Group (PLG) unit. The PLG unit sells
footwear and related products, both wholesale and retail, for
children and adults under popular brands which include Stride Rite,
Sperry Top-Sider, Saucony, and Keds.
We expect the acquisition to provide ample opportunities to
Wolverine for boosting its growth prospects while facilitating the
company to enhance its portfolio of brands.
Going forward, Wolverine expects revenues to be in the
low-to-mid-single-digit range, while earnings are expected to
remain flat year over year for the third quarter of 2012.
Moreover, for fiscal 2012, the company expects total revenue in
the range of $1.46 billion to $1.50 billion, reflecting a
year-over-year growth of 3.6% to 6.4%.
Currently, we are maintaining a long-term 'Neutral'
recommendation on the stock. However, Wolverine, which competes
Deckers Outdoor Corporation
Skechers USA Inc
), has a Zacks #4 Rank that translates into a short-term 'Sell'
rating as secular headwinds act as short-term deterrents for the
DECKERS OUTDOOR (DECK): Free Stock Analysis
COLLECTIVE BRND (PSS): Free Stock Analysis
SKECHERS USA-A (SKX): Free Stock Analysis
WOLVERINE WORLD (WWW): Free Stock Analysis
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