Kontoor Brands of the U.S. Completes Sale of Lee Denim Business

en.Wedoany.com Reported - On November 3, the U.S. apparel company Kontoor Brands completed the sale of its Lee denim business to Authentic Brands Group. The transaction involves the Lee brand-related business and equity, with the two parties having previously signed a formal acquisition agreement in May 2026. Under the original transaction terms, the initial consideration for the divested business was $750 million, plus future performance-based contingent consideration of up to $250 million, corresponding to a potential total transaction value of up to $1 billion.

According to the transaction announcement released by Kontoor Brands on May 21, the additional $250 million in consideration depends on the future operating performance of the Lee business during Authentic Brands Group's ownership and is not guaranteed income fully receivable upon closing. The company's previously filed documents with the U.S. Securities and Exchange Commission further specify that the performance-based contingent consideration has a five-year assessment period. The November 3 closing announcement confirmed that the transaction has been completed, but did not disclose the final net proceeds after settlement adjustments or the actual amount of future performance consideration realized.

According to securities regulatory filings submitted by Kontoor Brands, the buyer is ABG-Storm LLC, an affiliate of Authentic Brands Group, and the subject of the transaction is all issued and outstanding shares of The H.D. Lee Company, Inc. The two parties signed the equity purchase agreement on May 20, 2026, and Kontoor Brands publicly announced the transaction arrangements the following day, subsequently advancing regulatory approvals and other closing procedures in accordance with the agreement.

Kontoor Brands classified the Lee business as held for sale in the first quarter of 2026 and reported it as a discontinued operation. The company previously disclosed that the Lee business recorded after-tax discontinued operations profit of $7.8 million in the second quarter of 2026, compared with $15.2 million in the same period of 2025; the corresponding profit for the first half of 2026 was $39.2 million, compared with $47.8 million in the same period of 2025. These figures represent historical operating results prior to the completion of the transaction and are not gains generated from this sale.

Scott Baxter, Chairman and Chief Executive Officer of Kontoor Brands, stated in the November 3 transaction completion announcement that the company's management and relevant teams have completed the divestiture. Following the exit of the Lee business, Kontoor Brands' primary brand portfolio will focus on Wrangler and Helly Hansen, covering product categories including denim apparel, outdoor apparel, and workwear.