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U.S. companies strike large deals

People walk by a Timberland on Monday in New York City. VF Corp. is buying the bootmaker for $2.2 billion and plans to make it part of its outdoor and action sports business.

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People walk by a Timberland on Monday in New York City. VF Corp. is buying the bootmaker for $2.2 billion and plans to make it part of its outdoor and action sports business.

The acquisitions and mergers departments at several prominent U.S. companies were busy Monday, resulting in some large-scale deals being made.

Clothing maker VF Corp., whose brands include Wrangler, Nautica and North Face, agreed to buy the bootmaker Timberland, while Wendy's/Arby's Group Inc. said it would sell control of its Arby's restaurant business to a private equity firm that owns several other quick-service franchises including Moe's Southwest Grill and Auntie Anne's. In addition, Google Inc. has struck a deal to buy Admeld, a service that helps websites make more money from online advertising. Here's a closer look at each of the deals:

VF-TIMBERLAND: VF, which has agreed to buy Timberland for $2.2 billion, plans to make Timberland part of its outdoor and action sports business. VF said Timberland's headquarters will remain in Stratham, N.H. With the addition of Timberland, VF's outdoor and action sports business, which also includes Vans, Jansport, Eastpak and other brands, will make up 50 percent of the company's total revenue. They expect that to grow to 60 percent by 2015.

VF of Greensboro, N.C., said the boards of both companies have approved the deal. It expects the sale to close during the third quarter. VF executives said they plan to expand Timberland's apparel offerings and spur growth overseas in countries such as China. The acquisition gives VF ways to cut costs, an opportunity to better position the Timberland brand and hidden growth drivers with Timberland's other brands Earthkeepers and Smart Wool, said Wall Street Strategies analyst Brian Sozzi.

Wendy's/Arby's Group-Roark Capital Group: The Atlanta private equity firm's purchase of the Arby's brand marks the end of a union formed in 2008 between fast-food chains Wendy's and Arby's and represents a role reversal. Roark, which already owns Moe's Southwest Grill, Cinnabon and other restaurants, will pay $130 million in cash for an 81.5 percent stake in Arby's. It also will assume $190 million worth of Arby's debt.

CEO Roland Smith said the company's decision to keep an 18.5 percent stake in Arby's should signal its confidence in Arby's future.

Wendy's/Arby's will change its name after the sale is completed. Spokesman Bob Bertini said the company is considering options, and the new name will include the word "Wendy's."

Google-ADmeld: The agreement announced Monday positions Google to add another potentially valuable weapon to its advertising arsenal. Google already sells the most advertising on the Internet. The company's total ad revenue is expected to surpass $30 billion this year — greater than the entire newspaper industry. For that reason, the proposed acquisition of Admeld may face more regulatory scrutiny than most deals of its size do.

Financial terms of the Admeld agreement weren't disclosed, an indication that Google isn't paying a high enough price for the proposed acquisition to be considered a major financial event.

Founded three years ago, privately held Admeld employs about 100 workers at its New York headquarters and other offices in San Francisco, London, Berlin and Toronto.

Admeld's service is focused on marketing campaigns that promote brands and typically feature imagery. The format is known as display advertising, an area where Google has been gaining market share since its $3.2 billion acquisition of DoubleClick Inc. in 2008.

U.S. companies strike large deals 06/13/11 [Last modified: Monday, June 13, 2011 9:24pm]
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