From Deseret News archives:
Berkshire Hathaway to buy Russell
The deal is worth about $597.2 million, or $18 per share, based on Russell's roughly 33.2 million shares outstanding. Berkshire also will assume $400 million to $500 million in debt as part of the acquisition, Russell spokeswoman Nancy Young said.
Russell shares closed down 25 cents to $13.30 on the New York Stock Exchange on Monday.
Atlanta-based Russell which makes sportswear under the Jerzees, Spalding and Russell Athletic brands in February posted a 15 percent rise in fourth-quarter earnings. However, the company forecast a loss for the first quarter due to restructuring charges.
Russell's net income fell from $47.9 million in 2004 to $34.4 million last year. Jack Ward, Russell's chairman and chief executive, said the merger places Russell in a stronger financial position.
Russell said its troubles in 2005 stemmed from operational issues, some of which stemmed from Hurricane Katrina. More than half of the ports Russell uses were closed, and the company faced higher energy, transportation and raw material costs.
The acquisition, which is subject to stockholder and regulatory approvals, is expected to close in the third quarter this year.
When the deal is complete, "Russell will be better positioned against our worldwide competitors in all three segments of our business and that includes apparel, sports equipment and athletic shoes," Ward said in a statement.
Berkshire Hathaway officials did not immediately return a call for comment.
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