VF Corp said on Monday it would pay $2.1 billion to buy streetwear apparel company Supreme, adding another popular brand to the Vans shoe maker's roster.
VF Corp, which also houses brands such as The North Face and Timberland, said it would make an additional payment of up to $300 million subject to satisfaction of certain post-deal closing milestones.
Shares of VF Corp rose 10% to $77.24 in premarket trading.
It added that current investors Carlyle Group and New York-based private equity firm Goode Partners are selling their stakes in Supreme, which was founded by American-British businessman James Jebbia in 1994.
Known for its red box logo with "Supreme" written in white, the brand has gained a following among "hypebeats," or fans of the streetwear style, with product launches selling out in minutes and people lining up outside stores for hours.
VF Corp's deal with Supreme will help bolster its e-commerce business that has become the need of the hour for apparel and footwear makers due to the COVID-19 pandemic.
"The Supreme brand will further accelerate VF's hyper-digital business model transformation," VF Corp Chief Executive Officer Steve Rendle said.
Supreme, which has collaborated with many prominent fashion names including Louis Vuitton as well as Nike, Levi and Vans, gets over 60% of its revenue from the online business.
The deal, which is expected to be completed late in calendar year 2020, is anticipated to contribute at least $500 million of revenue and adjusted earnings per share of 20 cents in fiscal 2022.