China-based sports brand Xtep International Holdings Ltd announced on Thursday its plans to acquire E-Land Footwear USA Holdings Inc., the parent company of K-Swiss, Palladium, and Supra for US$260 million in an all-cash deal.
Xtep has agreed to buy a 100% stake in E-Land Footwear from South Korean-based E-Land World Ltd. and E-Land USA Holdings Inc., according to a Xtep’s filing to the Hong Kong bourse.
According to a statement, Xtep believes that the transaction is an attractive opportunity to grow into a global multi-brand portfolio group by investing in a portfolio of global renowned sportswear and lifestyle brands targeting the high-end market segment. K-Swiss and French brand Palladium, each have distinct brand positioning and different target customers. These are highly complementary to the company’s current brand portfolio.
E-Land Footwear USA is the owner of three international brands – K-Swiss, Palladium, Supra. It also held two sub-brands, PLDM and KR3W. Under these brands, the company is engaged in the design, development, and marketing of footwear, apparel, and accessories for athletic, high-performance sports and fitness, as well as casual wear.
Ding Shui Po, Xtep chairman and CEO, said, “Not only will it strengthen Xtep’s foothold in the expanding Chinese sportswear market, but will also provide us with growth opportunities in untapped overseas markets such as Southeast Asia. In other words, Xtep has what it takes to speed up business growth both domestically and overseas in the years to come.”
As of year-end 2018, the revenue of the deal’s target group was US$2.1 million, having increased by 1.9% year-on-year. K-Swiss has logged year-on-year growth of 12% to hit US$109 million in 2018, while Palladium also recorded 10% growth to hit US$77.9 million.
The deal is expected to be completed by the end of July.