The Timberland Co. will pay an estimated $82 million to acquire SmartWool Corp., a Steamboat Springs company that made its mark with socks made from merino wool.
SmartWool employs 50 people in Colorado. It will become a Timberland subsidiary and will continue to operate from Steamboat Springs, said Chip Coe, SmartWool’s president.
Coe and the management team will remain in place.
Timberland is a New Hampshire-based company with a $2 billion market value that designs and markets outdoor footwear and apparel.
The sale will result in more innovative products from SmartWool, Coe said. Besides socks, the company makes thermal underwear, gloves, hats, sweaters, vests and jackets.
“We now have access to world-class research and development facilities,” Coe said.
Timberland and SmartWool partnered to produce casual- wear shoes with SmartWool linings this year.
“We know them quite well, and when we started to collaborate with them, the relationship just continued to expand and grow,” Coe said.
This year, SmartWool’s revenues are expected to be about $42 million, excluding sales of Timberland footwear with SmartWool linings.
Ski instructors Peter and Patty Duke founded SmartWool in 1994. The couple went looking for a long-fiber wool that would retain heat and wick moisture like a typical wool but wouldn’t cause the wearer to itch.
They found what they were looking for on the backs of merino sheep and now have an agreement to buy the wool from New Zealand.
Timberland will acquire privately held SmartWool’s stock from RAF Industries, a holding company, and the Stripes Group LLC, an investment company.
Philadelphia-based RAF Industries was an initial investor and bought out the Dukes’ interest for an undisclosed amount in 2003.
Timberland anticipates this transaction will add 2 cents to 3 cents to its earnings per share in 2006. Timberland’s stock closed Wednesday at $31.14, up 12 cents from the previous day’s closing.
Staff writer Tom McGhee can be reached at 303-820-1671 or tmcghee@denverpost.com.
