VF Corp., which already owns and operates apparel brands such as The North Face, Wrangler and Lee, is adding another to its portfolio: The Timberland Co.

VF is acquiring Timberland, No. 368 in the Internet Retailer Top 500 Guide, in a deal valued at $2 billion. VF will pay $43 per share for Timberland, which is expected to generate sales of about $1.6 billion in 2011, the company says. Web sales for Timberland increased 27.3% to $25.2 million in 2010 from $19.8 million in 2009.

“The Timberland brand is synonymous with high quality outdoor footwear and apparel,” says VF CEO Eric Wiseman. “We believe the unique rugged outdoor positioning of Timberland will perfectly complement the premium, technical positioning of The North Face brand. This acquisition will continue the transformation of VF’s portfolio, propelling VF’s outdoor and action sports businesses to 50% of total revenue.”

VF, which generated $120 million in online sales in 2010 and is No. 138 in the Internet Retailer Top 500 Guide, will use the acquisition of Timberland to grow both its online and international sales base. About 50% of all Timberland revenue is generated overseas, says VF.

The acquisition is expected to close sometime in the third quarter. VF, which plans to pay for the deal with cash, commercial paper and some debt, expects to add about $700 million in Timberland revenue to its total sales base in 2011.

VF also says it will grow the Timberland brand about 10% annually by leveraging its e-commerce base, its own international operation, expense management and better supply chain operations. “VF is known for its ability to acquire and grow authentic outdoor brands, while protecting a brand’s unique culture and DNA,” says Timberland CEO Jeffrey Swartz.

VF, which has ambitious plans to grow its e-commerce business to $400 million in sales in five years, continues to grow through acquisition. In March VF acquired the trademarks and related intellectual property of Rock and Republic Enterprises Inc., a specialty apparel retail brand for young people, for approximately $57 million.

VF, which grew its total sales about 7% to $7.7 billion in 2010 from $7.2 billion in 2009, sees the outdoor apparel market as a big part of the company’s future, especially now that Timberland is being added to the portfolio, says Wiseman. “This will be a winning combination, leveraging VF’s international and direct-to-consumer platforms to drive growth in the Timberland brands globally,” he says.

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