Nike Inc. (Beaverton, Ore.) has reached agreement on an all-cash offer to acquire Umbro plc (Cheadle, U.K.), the manufacturer and retailer of soccer uniforms, equipment and footwear. The deal will be worth approximately $582 million.
Nike said it intends to operate Umbro as a stand-alone affiliate brand, similar to its operating arrangement with other Nike affiliate brands, such as Converse and Cole Haan.
“Umbro is a brand with a powerful heritage and deep experience in the world's most popular sport and the world's biggest football market,” said Nike, president and ceo Mark Parker. “With its close links to The Football Association and the England team, Umbro's future is even stronger than its past. This dynamic alignment of Umbro and Nike, with our complementary strengths and numerous ways to segment and grow the market, will lead the game at every level throughout the world. We are fully committed to helping Umbro reach its full potential, and we are delighted that Umbro's board is unanimous in its support of our offer.”
The acquisition will significantly expand Nike's global leadership in soccer (or football in the rest of the world), a key growth category for the company. Since the early 1990s, Nike has grown its soccer revenues from about $40 million to approximately $1.5 billion. Umbro sells products directly or through licensees in more than 90 countries and has sports marketing relationships with many top players, teams and leagues, including the England national team. Umbro's 2006 annual revenues were approximately $276 million.
Since Nike acquired Converse in 2003, revenue has grown at a compound rate of 22 percent. In fiscal 2007, Converse revenues grew over 20 percent to surpass $550 million.