Canadian Tire announced Wednesday that it has signed a definitive agreement to sell its Helly Hansen business to Kontoor Brands, Inc. for total gross proceeds of $1.276 billion, subject to closing adjustments. The transaction reflects CTC’s increasing focus on its Canadian retail portfolio, said the company in a news release.
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, it said.
“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.”
Canadian Tire and Kontoor anticipate a smooth transition for employees, customers and partners, said the news release.
“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
Canadian Tire said it 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 as 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.
- It 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 billion, 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.
Canadian Tire’s 2018 Acquisition of Helly Hansen: A Strategic Expansion into Global Outdoor Retail
In May 2018, Canadian Tire Corporation announced its agreement to acquire Helly Hansen. The strategic move aimed to enhance Canadian ’Tire’s owned brand portfolio and bolster its presence in the outdoor and workwear sectors. The acquisition was finalized in July 2018.
The transaction involved Canadian Tire Corporation purchasing the company that owns and operates the Helly Hansen brands and related businesses for $985 million CAD, while assuming approximately $50 million CAD of operating debt, net of cash. The acquisition was expected to be immediately accretive to Canadian Tire Corporation’s earnings per share (EPS), earnings before interest, taxes, depreciation, and amortization (EBITDA), and cash flow, even before realizing potential synergies.
Following the acquisition, Helly Hansen’s CEO, Paul Stoneham, and the existing management team continued to lead the business from Oslo, reporting to CTC’s Executive Vice President. This continuity aimed to preserve Helly Hansen’s brand identity and operational expertise while benefiting from CTC’s financial strength and retail network.
About Canadian Tire Corporation and Helly Hansen
Canadian Tire Corporation, Limited is a group of companies that includes a Retail segment, a Financial Services division and CT REIT. The retail business is led by Canadian Tire, which was founded in 1922. 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. It has close to 1,700 retail and gasoline outlets and CTC’s Financial Services division.
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.
I bought Helly Hansen partly because it was based in Oslo. I wasn’t happy about the CT acquisition, but at least it seemed to keep the original structure intact. What will happen now that it’s being sold to a North Carolina based conglomerate?