VF Corp. (VFC - Get Report)  announced on Monday, Aug. 14, that it will acquire Williamson-Dickie Manufacturing Co., the maker of Dickies work apparel, for $820 million in cash.

"This is obviously a very exciting moment for both VF and Dickies," Steven Rendle, VF chairman, president and CEO, said on a company call Monday. "This acquisition marks another milestone for us in our journey. It is a meaningful step forward."

VF, the Greensboro, N.C.-based branded lifestyle apparel, footwear and accessories maker behind North Face and Timberland, said the deal, subject to approval, is expected to add $1 billion in revenue by 2021, allowing it to eventually reach $15 billion in sales; provides immediate accretion to earnings per share and free cash flow in 2017; and will allow the company to deliver returns to shareholders in the mid- to high-teens range.

Combined, VF and Williamson-Dickie will become one of the largest companies in outdoor work-related apparel, Rendle said on Monday's call.

Fort Worth, Texas-based Williamson-Dickie designs, manufactures and sells its work apparel through a network of retail partners, owned stores, online sites and franchisees. Its brands include Dickies, Workrite, Kodiak, Terra and Duxbak. Williamson-Dickie was founded in 1922 by the family of Philip Williamson, the company's chairman and CEO.

VF CEO Steve Rendle.
VF CEO Steve Rendle.

On the call, Rendle said that both companies have a strong partnership with big-box, discount retailer Walmart Stores Inc. (WMT - Get Report) and added that he hopes, together, they can strengthen that relationship. He made after CNBC first reported on Monday, citing research by KeyBanc analysts, that Walmart has been discretely ramping up its online advertising efforts.

Rendle also said, while it is too early to make any big decisions, VF will consider opening stores under the Dickies brand, like it did with Timberland and North Face. Monday's deal marks VF's first acquisition since its blockbuster $2.3 billion buy of Timberland in 2011.

VF raised its 2017 full-year guidance, now expecting revenue of $11.85 billion, a 3.5% year-over-year increase and higher than its previous estimate for revenue of $11.65 billion; operating margin of 13.7%, compared to 14%; gross margins of 49.5%, versus 49.8%; and earnings per share of $2.96, up from $2.94.

On July 24, VF reported second-quarter earnings of 29 cents a share, lower than the earnings of 34 cents a share it generated in the year-ago period. The company posted revenue of $2.36 billion, compared to the previous year's second-quarter revenue of $2.45 billion.

Barclays is acting as financial adviser to VF while Davis Polk and Wardell LLP is providing legal counsel to the company. Shares of VF climbed nearly 2% late Monday morning. Year to date, the stock is up almost 18%.

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