Rocky Shoes & Boots Inc is to buy the privately held branded footwear maker EJ Footwear Group for $87.7 million in a deal that will more than double the Rocky business.

The purchase price includes 484,261 shares of Rocky common stock, valued at $10m. EJ Footwear will have no debt and a working capital of a minimum of $53.1m at the closing.

Alongside the transaction, Rocky has negotiated a term sheet for credit facilities totalling $148m with GMAC Commercial Finance LLC and American Capital to pay for the acquisition and replace its current revolving credit facility.

The transaction, which has been approved by the board of directors of Rocky Shoes & Boots, is expected to close in early January 2005.

It relies on Rocky's receipt of firm financing commitments from GMAC Commercial Finance and American Capital by mid-December 2004, audited financial statements of EJ Footwear for the previous three years, the funding of the credit facilities at the time of the sale's close, and other customary conditions.

Mike Brooks, chairman and chief executive officer of Rocky Shoes and Boots said: "We are extremely excited about joining forces with the EJ Footwear Group."

He added that the acquisition would more than double the Rocky business, add more diversity to its operating platform, lessen seasonality, and considerably improve its future growth potential.

Franklin, Tennessee-based EJ Footwear has three subsidiaries - EJ Footwear LLC, Georgia Boot LLC, and HM Lehigh Safety Shoe Co LLC - which are all owned by Strategic Industries LLC.

Rocky Shoes & Boots Inc designs, develops, manufactures and markets premium quality rugged outdoor, occupational, and casual footwear, as well as branded apparel and accessories.