(Reuters) - Canadian Tire Corp will buy Norway-based Helly Hansen for C$985 million ($771.2 million) including debt, the retailer said on Thursday, making a bigger push into high-end sportswear in a bid to diversify itself further.
Toronto-based Canadian Tire, whose stores sell everything from clothes to kitchen appliances across the country, already sells Helly Hansen’s trademark parkas.
The 96-year old retailer has been steadily moving away from its roots of selling car parts and appliances to offering sportswear and apparel to attract millennial shoppers.
Helly Hansen owns stores in more than 40 countries and counts the United States, United Kingdom, Norway and Canada as core markets.
“With our capabilities and Helly Hansen’s trusted global brand and management team, we see tremendous opportunity for Canadian Tire and Helly Hansen, in Canada and internationally,” said Stephen Wetmore, chief executive officer of Canadian Tire.
Helly Hansen, currently owned by the Ontario Teachers’ Pension Plan, sells clothes and gear for sailing, skiing, mountaineering and hiking at its own stores as well as retailers like Nordstrom.
With parkas that can cost more than $1,000, the European brand competes with American rivals like The North Face, Columbia Sportswear and Patagonia.
In its acquirer’s home country, Helly Hansen competes with hip winter-wear maker Canada Goose.
Canadian Tire said the deal is part of its strategy to sell its own brands internationally.
“In addition to fitting in exceptionally well strategically, we get a well run profitable business that is immediately accretive to our earnings,” Canadian Tire Chief Financial Officer Dean McCann told analysts on a conference call.
The deal is expected to close in the third quarter.
Separately on Thursday, Canadian Tire also reported quarterly results that showed net income fell 8 percent to C$99.1 million in the three months to March 31 as expenses rose 7.8 percent.
The company, like other retailers, has been spending more on online services and offering promotions to fend off competition from the likes of Amazon.com Inc.
Excluding one-time items, Canadian Tire earned C$1.37 per share, while analysts on average had expected C$1.38, according to Thomson Reuters I/B/E/S.
Its same-store sales rose 5.2 percent as more people shopped its brands during the winter. Total revenue climbed 3.4 percent to C$2.81 billion.
Reporting by Akshara P in Bengaluru; Editing by Sai Sachin Ravikumar