Roots agrees to go-private deal with U.S. company Marquee Brands

The Roots 'Cabin' store at Yorkdale Shopping Centre is seen in Toronto on August 23, 2017. Photo by Laura Pedersen/National Post

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Roots, the iconic Canadian heritage outdoor and lifestyle brand, will go private and be acquired by American company Marquee Brands, Roots Corp. announced on Thursday.

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Marquee Brands, a brand management company that operates 24 brands incuding Roberto Cavalli, BCBGMAXAZRIA, Martha Stewart, Laura Ashley and more, will acquire Roots through operating partner JM&A Design and Development Inc., led by renowned Canadian retail experts Joe Mimran and Frank Rocchetti.

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The company said the transaction is “designed to preserve all that makes Roots uniquely Canadian, while bringing the brand to more consumers around the world.”

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“Taking on Roots is an incredible honour, and our strategic partnership with JM&A ensures the brand remains anchored in Canadian culture,” said Heath Golden, chief executive of Marquee Brands. “With that foundation in place, we see significant global opportunity to extend Roots into new categories, markets and consumer segments, while remaining true to all that makes the brand distinctive.”

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Roots shareholders will receive $4.10 per common share in cash, representing a 36 per cent premium to the closing price as of March 2, the last trading day prior to the announcement of the company’s strategic review process by the company’s board of directors.

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Roots said JM&A will serve as core operating partner of Roots and oversee the design, development, manufacturing and distribution of men’s and women’s lifestyle apparel and assume responsibility for retail and e-commerce operations across Canada and the United States, including the Roots fleet of more than 100 North American stores.

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Meanwhile, Marquee Brands will “galvanize the brand’s global growth,” focusing on global brand stewardship and expansion, as well as new category development, it said.

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The company said Roots will remain in Canada, “guided by Canadian operating leadership who understand the Roots customer as well as the brand’s heritage and its enduring place in Canadian culture.”

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“Few brands are as deeply connected to Canada’s identity as Roots,” said JM&A president and creative director Mimran, who is best known for founding the Club Monaco and Joe Fresh brands and previously starring in television series Dragons’ Den.

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Mimran said the opportunity is to build from Roots’ strength, “while remaining true to the character that has made Roots so distinctive.”

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“Frank and I look forward to leading the business from Canada in partnership with Marquee Brands and positioning the brand for its next phase of growth,” he added.

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The company said private ownership provides the optimal structure for Roots to pursue long-cycle investment decisions in its next chapter of growth, with its headquarters remaining in Toronto.