In a move that's sure to tick off sneaker purists, Nike (NYSE:NKE) will acquire old-school rival Converse for $305 million, plus the assumption of certain liabilities. The deal, which closes a difficult chapter for Converse, positions Nike to grab a bigger piece of the mid-priced market.

Ironically, when Converse, a blacktop favorite since 1908, fell on rough times in the 1980s and 1990s, it largely had Nike to blame. After all, who but Nike charmed the next generation of ballers with expensive, technology-driven kicks? Remember, it was "Air" Jordan who eclipsed Chuck Taylor as the go-to name in basketball shoes.

The rest is history. Clean lines and cult status couldn't compete with Nike's high-priced and ostentatious offerings, and Converse filed for bankruptcy in January 2001. By April, private investors had acquired the venerable Converse assets.

Out of nowhere, fashion came to Converse's aide, as "retro" styles took off. Kids clamoring for stripped-down classics from "authentic" brands sent revenues soaring to $205 million in 2002 from the prior year's $149 million. Net income grew to $18.6 million, vs. 2001's $5.8 million.

Last year, Converse filed papers with the SEC for an initial public offering. Instead, the company will operate as a subsidiary of the much larger Nike. (Nike booked $10.7 billion in revenues for fiscal 2003, compared to Converse's $205 million.)

Good for Nike. For a company that's been battling a rejuvenated Reebok (NYSE:RBK), Converse offers a relatively safe entry into the lower-priced shoe market. And while Nike's paying for the honor, had Converse gone public first, the price tag might have been a whole lot higher.

Converse, meanwhile, gets the benefit of Nike's deep marketing pockets, as well as its production and distribution machine. Not to mention, just reward for its private investors.

Looks like a win/win to me.

LouAnn Lofton owns shares of Nike.