Converse One Star
Converse One Star

DALLAS, Jul 10, 2003/ FW/ — Sports giant Nike just became bigger. The Oregon-based company announced today that it has entered into a definitive agreement to acquire Converse, Inc., the globally recognized footwear brand with nearly a century of sports heritage.

The total price to be paid for 100 percent of the equity shares is approximately $305 million plus the assumption of certain working capital liabilities at the time of the transaction’s consummation.

According to the official statement, the acquisition of Converse fits with the company’s strategy of acquiring strong brands that it can grow further.

“Converse is one of the strongest footwear brands in the world with great heritage and a long history of success,” quoted Tom Clarke, Nike’s President of New Business Ventures. “Together, Nike and Converse will generate even greater access to a dynamic consumer base.”

Founded in 1908, Converse created legendary shoes as the Chuck Taylor® All Star®, the Jack Purcell®, One Star®, and other authentic heritage products.

Based in North Andover, Massachusetts, Converse sells its products in over 12,000 athletic specialty, sporting goods, specialty, department and national chain stores across the United States and Canada, and through 42 licensees in over 100 countries.

Though the brand had remained strong through the years, it had its share of financial troubles.

In January 2001, after years of declining sales, Converse parent company CVEO Corp. filed for Chapter 11 bankruptcy protection. A firm backed by Chairman Marsden Cason bought the company and in late 2002, filed to take it public, according to business information researcher Hoover’s, which tracks private and public companies.

But the IPO never materialized, and up to now, Converse continues to be privately held.

For 2002, Converse, Inc. revenue totaled $205 million, with a net income of $18.6 million. Worldwide wholesale sales of all products bearing the Converse brand, generated by Converse, Inc. and its licensing partners and affiliates (excluding Japan), were approximately $390 million for 2002.

“The Nike brand has always been rooted in performance and innovation,” Tom Clarke said. “Converse certainly meets our criteria and its brand equity offers potential to drive even greater revenue and earnings performance. We believe the addition of Converse to our increasingly diverse Nike, Inc. portfolio will contribute to creating long-term shareholder value.”

Consummation of this transaction is subject to regulatory review, including U.S. government review under the Hart-Scott-Rodino Premerger Notification Act.