FOR IMMEDIATE RELEASE
Contact: Frank A. Caruso
(617) 824-6611
Stride Rite Corporation
The Stride Rite Corporation Completes Acquisition of Saucony, Extending
Portfolio of Nationally Recognized Footwear Brands
LEXINGTON, Mass.--(BUSINESS WIRE)--Sept. 16, 2005--The Stride Rite
Corporation (NYSE: SRR) today announced that it has completed the
acquisition of Saucony, Inc. (NASDAQ: SCNYA) (NASDAQ: SCNYB), a leader in
performance running shoes, for a total purchase price of approximately $170
million in cash. The acquisition expands Stride Rite's portfolio of
nationally recognized footwear brands, and is expected to be accretive to
Stride Rite's earnings starting in 2006.
Under the terms of a definitive agreement announced on June 2, 2005, and
approved today by Saucony shareholders, each Saucony Class A and Class B
share will be converted into the right to receive $23.00 in cash without
interest. The acquisition is being financed with cash on hand and
borrowings under a new $200 million revolving credit facility led by Bank
of America, N.A. The total purchase price of approximately $170 million is
based on the current number of shares of Saucony's common stock outstanding
and net option value. Existing cash at Saucony reduces the net transaction
value to approximately $140 million.
Saucony brings to Stride Rite a business with 2004 revenues of
approximately $167 million in performance athletic footwear, apparel and
accessories under the Saucony, Saucony Originals, Hind and Spot-bilt
brands.
"This is an exciting day for both Stride Rite and Saucony," said David M.
Chamberlain, Stride Rite's Chairman and Chief Executive Officer. "The
addition of Saucony to our portfolio of nationally recognized footwear
brands provides us with a well-known technical athletic brand with loyal
customers and solid growth prospects. We welcome the employees and business
partners of Saucony to the Stride Rite family. This transaction combines
two leading footwear companies with strong balance sheets and cash flows,
similar corporate cultures, and shared roots in the greater Boston area
dating back to the early 1900s."
About Stride Rite
Headquartered in Lexington, MA, The Stride Rite Corporation is an NYSE
company with approximately $558 million in 2004 sales that markets the
leading brand of high-quality, non-athletic children's shoes in the U.S.
Other footwear products for children and adults are marketed by the Company
under well-known brand names, including Stride Rite, Keds, PRO-Keds,
Saucony, Sperry Top-Sider, Tommy Hilfiger and Grasshoppers. Information
about the Company is available on our website - www.strideritecorp.com.
Information about the Company's brands and product lines is available at
www.striderite.com, www.keds.com, www.saucony.com and
www.sperrytopsider.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995: This announcement includes forward-looking statements which reflect
Stride Rite's current views with respect to the future events or financial
performance discussed in the release, based on management's beliefs and
assumptions and information currently available. When used, the words
"believe", "anticipate", "estimate", "project", "should", "expect",
"appear" and similar expressions, which do not relate solely to historical
matters identify forward-looking statements. These forward-looking
statements, which include statements regarding the expected benefits of the
acquisition of Saucony and the impact of the acquisition on Stride Rite's
financial results, are subject to risks, uncertainties and assumptions and
are not guarantees of future events or performance, which may be affected
by known and unknown risks, trends and uncertainties. Should one or more of
these risks or uncertainties materialize, or should our assumptions prove
incorrect, actual results may vary materially from those anticipated,
projected or implied. Factors that may cause such a variance include, among
others: the inability to fully realize the anticipated benefits from the
acquisition of Saucony; the challenges of achieving the expected synergies;
the possibility of incurring costs or difficulties related to the
integration of the businesses of Stride Rite and Saucony; the opening of
new stores may be delayed; the volume of anticipated sales may decline;
revenues from new product lines may fall below expectations; the launch of
new product lines may be delayed; new retail concepts may not achieve
expected results; general retail sales trends may be below expectations;
current license agreements may be terminated; consumer fashion trends may
shift to footwear styling not currently included in our product lines; our
retail customers, including large department stores, may consolidate or
restructure operations resulting in unexpected store closings; and
additional factors discussed from time to time in our filings with the
Securities and Exchange Commission. We expressly disclaim any
responsibility to update forward-looking statements.
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