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Tickers in this Article: SKX, DECK, WWW, PSS
Wolverine World Wide Inc. (WWW), one of the leading designers, manufacturers and marketers of branded footwear and apparel, priced its $375 million worth of senior notes at 6.125%. Earlier this week, the company stated that the debt offering will carry a guarantee of its certain domestic subsidiaries, and is scheduled to mature in 2020. Wolverine stated that the net proceeds from the sale of debt would be around $367 million after meeting the expenses and initial purchasers' discounts and will only be offered to the qualified institutional buyers.

The company also stated that the proceeds from the offering will be used to fund its acquisition of the Performance + Lifestyle Group business (the "PLG Business") of Collective Brands Inc (PSS). Apart from this, the company intends to repay loans under its credit facility with the amount.

Wolverine is focusing on enhancing its portfolio of brands, thus the company announced the acquisition of Collective Brands' Performance + Lifestyle Group (PLG) unit. The PLG unit sells footwear and related products, both wholesale and retail, for children and adults under popular brands which include Stride Rite, Sperry Top-Sider, Saucony, and Keds. 

We expect the acquisition to provide ample opportunities to Wolverine for boosting its growth prospects while facilitating the company to enhance its portfolio of brands.

Going forward, Wolverine expects revenues to be in the low-to-mid-single-digit range, while earnings are expected to remain flat year over year for the third quarter of 2012.  

Moreover, for fiscal 2012, the company expects total revenue in the range of $1.46 billion to $1.50 billion, reflecting a year-over-year growth of 3.6% to 6.4%.

Currently, we are maintaining a long-term 'Neutral' recommendation on the stock. However, Wolverine, which competes with Deckers Outdoor Corporation (DECK) and Skechers USA Inc. (SKX), has a Zacks #4 Rank that translates into a short-term 'Sell' rating as secular headwinds act as short-term deterrents for the stock.

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