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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
So what: Timberland's shares jumped today as well, which is no surprise, but the move by VF was a huge vote of confidence in the company's move. The $2 billion all-cash deal will add about $700 million to sales and $2 per share in earnings by 2015, according to estimates.
Now what: VF is trying to add to its outerwear portfolio, which includes North Face, and management expects it to be 60% of the company's business by 2015. This is a step in that direction, and the market has so far agreed that it's a good move for both parties. Interestingly, VF's market cap increased more than $1 billion today, about half of the purchase price of Timberland, showing who the market thinks is getting the better end of this deal.
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