Steamboat Springs –
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, which employs 50 people in Colorado, will be a Timberland subsidiary and continue to operate from Steamboat Springs, said Chip Coe, SmartWool’s president.
Coe and the management team will remain in place, he said.
The sale to Timberland, a New Hampshire-based company with a $2 billion market value that designs and markets outdoor footwear and apparel, 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 earlier 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.
Peter and Patty Duke, a pair of ski instructors, founded SmartWool in 1994. This year, the company’s revenues are expected to be approximately $42 million excluding sales of Timberland footwear with SmartWool linings.
The Duke’s 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.
The couple 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.
The Philadelphia-based RAF Group was an initial investor and bought out the Duke’s 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
