A consortium made up of Wolverine Worldwide and private equity firms Blum Capital Partners and Golden Gate Capital has emerged as the winner in the race to buy footwear retailer Collective Brands Inc, after a $2bn deal was agreed today (1 May).

The transaction will see Wolverine Worldwide acquire Collective Brands' Performance + Lifestyle Group (PLG), which includes the wholesale and retail operations of the Sperry Top-Sider, Saucony, Stride Rite and Keds brands.

The unit, which had revenues of more than $1bn in the fiscal year to 31 January, will continue to operate out of Lexington, Massachusetts. The brands will join a line-up that includes Merrell, Hush Puppies, Wolverine and Sebago.

Meanwhile, investment firms Blum Capital and Golden Gate will jointly acquire the operations of Payless ShoeSource and Collective Licensing International (CLI), which will operate as a standalone entity.

Payless will continue to be headquartered in Topeka, Kansas and CLI in Englewood, Colorado. Together they had combined full-year revenues of $2.4bn, operating over 4,300 Payless retail stores globally.

"I am pleased with the outcome of this comprehensive strategic and financial review process," said Collective Brands CEO Michael Massey. "We expect that following the closing of the transaction, both Payless ShoeSource and our Performance + Lifestyle brands will be positioned for growth and success over the long term."

Wolverine Worldwide chairman and CEO Blake Krueger added: "Our Company is thrilled to add these four iconic brands to our proven global platform. This transaction provides dynamic portfolio expansion and diversification, and significant additional horsepower in five of our targeted growth areas - women's, athletic, casual, kid's and retail."

He said the acquisition "positions our business for accelerated long-term growth, both domestically and internationally, and adds to our strong model for delivering significant shareholder value."

"Payless is exactly the type of company in which we seek to invest - a strong brand with unparalleled global scale at an important inflection point in its evolution," commented Josh Olshansky, a managing director at Golden Gate Capital. Other retail investments by the private equity firm include Eddie Bauer, JJill, Pacific Sunwear and Express.

Collective Brands embarked on a strategic review last August and said it would close some 475 under-performing Payless and Stride Rite outlets.

Most recent results saw the firm swing to a fourth quarter net loss of US$41.6m, impacted by one-off charges related to these store closures and other expenses. Revenues rose 3.6% after adjustments, while comparable store sales increased 1.7%, helped by a 1.6% gain at the company's Payless retail chain in the US.

Today's agreement, which includes debt, will see Collective Brands shareholders receive $21.75 per share in cash. It is expected to close by early in the fourth quarter of this year.