Kontoor Brands to Acquire Helly Hansen

GREENSBORO, NORTH CAROLINA (February 20, 2025) – Kontoor Brands, Inc., a global lifestyle apparel company, with a portfolio led by brands, Wrangler^® and Lee^®, announced it signed a definitive agreement to acquire Helly Hansen, the global outdoor and workwear brand. Under the terms of the agreement, Kontoor Brands will acquire 100% of Helly Hansen from Canadian Tire Corporation.

“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.”

Acquisition Highlights

The acquisition of Helly Hansen builds on Kontoor’s success and advances its strategic and financial growth agenda. Acquisition highlights include the following:

Accelerates Revenue, Earnings Growth and Cash Flow Profile, and Increases Penetration in the Large and Growing Outdoor and Workwear Categories Globally

• Accelerates Kontoor’s growth profile, driven by a best-in-class product and innovation pipeline, with multiple category, geographic and channel expansion opportunities
• Scales Kontoor’s penetration in the large and growing Outdoor and Workwear markets globally
• Opportunity to double Helly Hansen operating margin and drive significant cash flow contribution over time through improved profitability and net working capital management

Diversifies Kontoor’s Portfolio Across Channels, Geographies, Categories and Consumers

• Complementary geographic, category, and channel footprint provides significant diversification benefits
• Leverages Kontoor’s strong U.S. presence while providing International scale benefits in Europe, Non-U.S. Americas, and Asia Pacific
• Provides access to affluent, active, and younger consumer base

Leverages Kontoor’s Global, Multi-Brand Operating Platform and Deep Management Expertise

• Helly Hansen to benefit from Kontoor’s scaled, multi-brand global operating platform
• Helly Hansen a more synergistic fit as part of a global, brand operator ownership structure
• Meaningful sources of synergies identified across Kontoor’s supply chain platform, technology capabilities, tax structure, and other scale and operating efficiencies
• Leverages Kontoor’s deep management expertise in outdoor and workwear categories globally
• Strong cultural alignment and proven Helly Hansen management team with long track record of success

Fast Path to Reduce Financial Leverage

• Expect to fund the transaction through a combination of excess cash on hand and new debt financing
• Net leverage expected to be less than 3x trailing twelve months’ pro forma adjusted EBITDA at the transaction close date
• On a combined basis, strong cash generation supports return to targeted net leverage range of between 1.0x and 2.0x within 12 months

Immediately Revenue, Earnings and Cash Flow Accretive with Opportunity to Drive Significant Shareholder Value Creation and Enhance Long-Term Capital Allocation Optionality

• Expect to deliver strong financial returns and meaningful earnings and cash flow accretion in 2025, excluding synergies
• Expect to achieve meaningful synergies over time, supported by operating efficiencies and improved net working capital management
• Accelerating operating profit and cash flow supports increased capital allocation optionality once financial leverage has been reduced
• Accretive to Kontoor Brands’ existing TSR commitment through enhanced fundamental growth model

Transaction Details

The Board of Directors of Kontoor Brands has approved the transaction. The transaction is expected to close in the second fiscal quarter of 2025, subject to the receipt of required regulatory approvals and customary closing conditions.

Kontoor expects to finance the transaction with a combination of cash on hand and new debt.

Advisors

Morgan Stanley & Co. LLC is serving as Kontoor Brands’ exclusive financial advisor and Foley & Lardner LLP as its legal advisor.