TORONTO, Feb. 19,
2025 /CNW/ - Canadian Tire Corporation, Limited (TSX:
CTC) (TSX: CTC.A), CTC or the Company) today 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."
Use of proceeds
The Company intends to adopt a balanced approach to the
allocation of the transaction proceeds, consistent with its past
practice. Proceeds are expected to be deployed to a combination of
debt reduction, share repurchases, as well investments to drive
customer experience and growth in its core Canadian retail
business. The proceeds will also provide CTC with additional
flexibility for general corporate purposes, including to address
market uncertainty. Further details will be communicated in a CTC
strategic update, to be published March 6,
2025.
Transaction details
- CTC has agreed to sell the company that owns and operates the
Helly Hansen brands and related businesses. In conjunction with the
transaction, CTC also expects to continue to sell Helly Hansen
products in its banners under a multi-year supply agreement with
Kontoor Brands.
- The Company expects the transaction to close in the second
quarter of 2025, subject to receiving all regulatory approvals and
other customary closing conditions as well as the signing of the
supply agreement between the two parties.
- Total purchase price is $1,276
million, subject to closing adjustments.
- Helly Hansen worldwide revenue in 2024 was $894 million, including sales to CTC. 2024 EBITDA
was $102 million on a Canadian IFRS
basis. 2024 adjusted EBITDA was $76
million under the pre-IFRS 16 accounting standard employed
by CTC at the time of the Helly Hansen acquisition.
Goldman Sachs & Co. LLC is serving as Canadian Tire
Corporation's exclusive financial advisor and Norton Rose Fulbright
Canada LLP as its legal advisor.
All amounts quoted in this release are in Canadian dollars.
Non-GAAP Financial Measures
This press release contains a reference to EBITDA and Adjusted
EBITDA, which are non-GAAP financial measures. Non-GAAP measures
have no standardized meanings under GAAP and may not be comparable
to similar measures of other companies.
FORWARD-LOOKING INFORMATION
This press release
contains information that may constitute forward-looking
information within the meaning of applicable securities laws, which
reflects management's current expectations regarding future events
and the proposed transaction. All statements other than statements
of historical facts included in this press release may constitute
forward-looking information including, but not limited to,
information with respect to: CTC's future plans and strategy,
including increased focus on its Canadian retail portfolio; the
timing to close the transaction; the use of the proceeds from the
transaction; and the proposed supply agreement. Often, but not
always, forward-looking information can be identified by the use of
forward-looking terminology such as "may", "will", "expect",
"intend", "believe", "estimate", "plan", "can", "could", "should",
"would", "outlook", "target", "forecast", "anticipate", "aspire",
"foresee", "continue", "ongoing" or the negative of these terms or
variations of them or similar terminology. Although the
Company believes that the forward-looking information in this press
release is based on information, estimates and assumptions that are
reasonable, such information is necessarily subject to a number of
risks, uncertainties and other factors that could cause actual
results to differ materially from those expressed or implied in
such forward-looking information, including the following risks:
the sale of Helly Hansen may not be completed; the transaction may
not be completed on the terms described or within the time
contemplated; conditions to closing, including receipt of
regulatory approvals, and entering into the supply agreement, may
not be met or, if met, not on terms acceptable to CTC or Kontoor;
and the proceeds from the transaction contemplated may used for a
purpose other than described. Management cautions that the
foregoing list of risks is not exhaustive and other risks could
also adversely affect CTC's results. For more information on
additional material risks, uncertainties, factors and assumptions
that could cause the Company's actual results to differ materially
from the forward-looking information, refer to section 14.0
(Forward-Looking Information and Other Investor Communication) of
the Company's 2024 Fourth Quarter and Full-Year Management's
Discussion and Analysis and all subsections therein, available on
the SEDAR+ website at http://www.sedarplus.ca and
https://investors.canadiantire.ca. The Company does not undertake
to update any forward-looking information, whether written or oral,
except as is required by applicable laws.
ABOUT CANADIAN TIRE CORPORATION
Canadian Tire
Corporation, Limited, (TSX: CTC.A) (TSX: CTC) (or "CTC"), is a
group of companies that includes a Retail segment, a Financial
Services division and CT REIT. Our retail business is led by
Canadian Tire, which was founded in 1922 and provides Canadians
with products for life in Canada
across its Living, Playing, Fixing, Automotive and Seasonal &
Gardening divisions. Party City, PartSource and Gas+ are key parts
of the Canadian Tire network. The Retail segment also includes
Mark's, a leading source for casual and industrial wear; Pro Hockey
Life, a hockey specialty store catering to elite players; and
SportChek, Hockey Experts, Sports Experts and Atmosphere, which
offer the best active wear brands. The Company's close to 1,700
retail and gasoline outlets are supported and strengthened by CTC's
Financial Services division and the tens of thousands of people
employed across Canada and around
the world by CTC and its local dealers, franchisees and petroleum
retailers. In addition, CTC owns and operates Helly Hansen, a
leading technical outdoor brand based in Oslo, Norway. For more information, visit
Corp.CanadianTire.ca.
ABOUT HELLY HANSEN
Helly Hansen is a globally
recognized leader in premium outdoor and lifestyle apparel and
footwear, with deep expertise in technical performance apparel in
ski, sailing, and workwear. Helly Hansen's family of brands and
trademarks are sold in more than 40 countries around the
world and include Helly Hansen, Helly Hansen Workwear, and
Musto.
Founded in Norway in 1877,
Helly Hansen continues to develop professional grade apparel that
helps people stay and feel alive. Through insights drawn from
living and working in the world's harshest environments, the
company has developed a long list of first-to-market innovations,
including the first supple waterproof fabrics nearly 150 years
ago.
To learn more,
visit www.hellyhansen.com, www.hhworkwear.com, and
musto.com.
FOR MORE INFORMATION
Media: Stephanie Nadalin, (647) 271-7343,
stephanie.nadalin@cantire.com
Investors: Karen Keyes, (647)
518-4461, karen.keyes@cantire.com
SOURCE Canadian Tire Corporation, Limited
