NEW YORK (The Deal) -- VF Corp. (VFC - Get Report) , the Greensboro, N.C.-based apparel conglomerate, has a successful track record of acquiring and integrating large consumer retail brands. That history includes its $2 billion purchase of Timberland in 2011, a deal that took more than 10 years to come to fruition. Since that transaction, VF executives have repeatedly voiced their interest in doing more deals, particularly because the company's growth plan is so aggressive that it can only hit the targets by continuing to buy other brands. VF has in the past told The Deal and TheStreet that a top priority for its use of cash is acquisitions.
But as in the case of Timberland, VF has demonstrated that it is both patient and opportunistic.
As of June 30, VF had nearly $660 million in cash and cash equivalents, while it had about $2.58 billion in debt. Meanwhile adjusted EBITDA projected for the fiscal year ending Dec. 31, 2015 is about $2.2 billion, according to data provided by Bloomberg. That would allow the company to borrow another roughly $6 billion and remain investment grade.
In addition, its current market cap of close to $29.3 billion gives the clothing group gives it substantial financial firepower, in addition to its balance sheet, to do deals.
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There are number of targets in various stages of distress that industry watchers consider as potential targets. Columbia Sportswear (COLM - Get Report) , Performance Sports Group (PSG - Get Report) , Black Diamond (BDE - Get Report) and Quiksilver (ZQK - Get Report) all could interest VF.
When presented with such targets in the past, VF has declined to comment, but has said that outdoor and action sports brands are most attractive, adding that a deal would need to be immediately accretive. Todd Spaletto, president of VF's The North Face, recently said to TheStreet: "We are seeing a very active female consumer, they enjoy doing Crossfit and other training classes."
