Apparel company

VF Corp.

(VFC) - Get Report

agreed to acquire clothing designer

Nautica Enterprises

(NAUT)

in a cash deal valued at $585.6 million.

VF will pay Nautica shareholders $17 a share in cash. The company will also pay about $14.6 million to cash out employee stock options. The takeover price represents a 28% premium to the closing price of Nautica shares on July 3.

The acquisition will add new brands to VF's portfolio, boost its presence in department and specialty stores and provide the company with a new entry in the sportswear category. Nautica's sales in the latest fiscal year totaled $694 million.

VF expects to close the transaction in the fourth quarter, and the company said the deal could add around 10 cents to its earnings per share in 2004. Nautica will continue to maintain its headquarters in New York and its distribution center in Martinsville, Va.

The boards of both companies have approved the merger. Nautica designs and distributes apparel under several brands, including Nautica, E. Magrath and Byron Nelson. VF's brands include Lee, Wrangler, JanSport and The North Face.

In premarket Instinet trading, shares of Nautica were gaining $3.53, or 27%, to $16.72. VF closed Thursday at $34.04.