Collective Brands to be acquired for $1.3 billion, broken up

NEW YORK — Shoe manufacturer Wolverine Worldwide Inc. has partnered with equity firms Blum Capital Partners and Golden Gate Capital to acquire Payless ShoeSource parent Collective Brands Inc. for about $1.3 billion.

Upon closing later this year, Wolverine – parent of Merrell and Hush Puppies -- will buy Collective's unit that owns brands Keds, Saucony and Stride Rite, which as a group generated revenues in excess of $1 billion last year. The investment firms will jointly acquire the Payless ShoeSource chain and Collective Licensing International unit, which will operate as a single company. The pair had combined sales of over $2 billion last year.

Last August, Collective Brands had announced that it would close nearly 500 underperforming stores over three years and was examining its alternatives.

“I am pleased with the outcome of this comprehensive strategic and financial review process,” said Michael Massey, CEO of Collective Brands. “Over the course of many months, the Collective Brands’ board of directors, working together with management and our financial and legal advisors, evaluated a number of alternatives to further enhance shareholder value. The transaction we (have announced), which was unanimously approved by our board of directors, delivers substantial, immediate value to our shareholders and is a clear reflection of the quality of our businesses. We expect that following the closing of the transaction, both Payless ShoeSource and our Performance + Lifestyle brands will be positioned for growth and success over the long term.”