Reebok to Buy Rockport for $118.5 Million
Reebok International, which this year will surge past Nike to be the dominant force in U.S. athletic footwear, said Tuesday that it has agreed to buy Rockport Co., a Massachusetts maker of walking and casual shoes, for $118.5 million.
Analysts viewed the acquisition as a big plus for Reebok, which indicated in February that it wanted to buy a well-managed consumer products company.
“They’ve looked at everything from toys and apparel to footwear,” said John Horan, publisher of Sports Ink, an industry newsletter in Yardley, Pa. In June, Reebok made an unsuccessful bid valued at about $277 million for Stride Rite, which makes Sperry Topsiders and children’s shoes.
Privately held Rockport “is the leading factor in walking shoes (and) gives Reebok a strong brand with an upscale product line,” said Brenda J. Gall, a vice president at Merrill Lynch in New York. With an annual growth rate of 45%, she noted, “Rockport needs financing to handle additional growth. Reebok, with its tremendous cash flow, can provide that.”
Shoes for Fitness Walking
Rockport, based in Marlborough, Mass., is owned by Bruce Katz, 39, a third-generation shoemaker who has spent about $2 million in recent years to promote fitness walking, the latest trendy sport for those whose joints resist jogging, tennis or aerobics. Katz (pronounced Kates) has designed models such as the RocSport, the ProWalker and the DresSport, a comfortable lightweight shoe that can pass for a traditional men’s dress shoe.
The company had 1985 sales of $64 million and is expected to pass the $100-million sales mark in 1986. It will become a wholly owned subsidiary of Reebok but will operate autonomously, according to a Reebok statement.
With the purchase of Rockport, Reebok Chairman Paul Fireman “emptied out his checking account pretty well,” Horan said. The company, which is expected to report 1986 sales of $800 million, including apparel, reportedly had about $125 million slated for acquisitions.
