NEW YORK (AP) -- Collective Brands Inc., which owns the shoe store chains Payless and Stride Rite, is being acquired for about $1.32 billion by a group that includes the owner of Hush Puppies.
Collective, which has been looking for a buyer since August, has agreed to an offer from a group including Hush Puppies' Rockford, Mich.-based owner Wolverine Worldwide Inc. and private investment firms Blum Capital Partners and Golden Gate Capital.
The transaction will split Payless and the company's brand development and licensing arm into a separate company.
The group will pay $21.75 for each Collective Brands share. That is a 5 percent premium to Collective Brands' closing price of $20.77 on Monday. The Topeka, Kan.-based company has about 60.8 million outstanding shares, according to Fact Set. The companies valued the deal at about $2 billion including debt.
Collective Brands shares gained 39 cents, or 1.9 percent, to close at $21.16 Tuesday after hitting a 52-week high of $21.34 earlier in the session.
As part of the deal, Wolverine will acquire Collective's Performance + Lifestyle Group, which includes the wholesale and retail operations of the Sperry Top-Sider, Saucony, Stride Rite and Keds brands. Performance + Lifestyle had fiscal 2012 revenue of more than $1 billion.
"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," Wolverine Chairman and CEO Blake Krueger said in a statement.
Shares of Wolverine, which is based in Rockford, Mich., fell 60 cents, or 1.4 percent, to $41.35 in morning trading.
Blum Capital and Golden Gate will jointly acquire Payless and Collective Licensing International, a brand development and licensing company. Payless and CLI had combined revenue of about $2.4 billion in fiscal 2012. While they will operate together as a standalone entity, Payless will remain headquartered in Topeka, Kan., and CLI's headquarters will stay in Englewood, Colo.
"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," Josh Olshansky, a Golden Gate managing director, said.
The deal comes less than a month after reports surfaced that Collective was considering two final buyout offers. One of those offers was said to be from Wolverine, while the other was said to be from South Korean company E-Land Group.
The acquisition was unanimously approved by Collective's board and is expected to close late in the third quarter or early in the fourth quarter.