The Adidas Group has agreed to take over Five Ten, the family-owned Californian brand, to complement its own offering of outdoor footwear with more specialized climbing and mountain biking products.

The two parties have agreed on a price of $25 million in cash, and contingent payments depending on the performance of the brand in the next three years. The transaction is expected to be completed in the next couple of weeks.

Five Ten is owned by the family of Charles Cole, who established the brand and its distinctive rubber compound, Stealth, in 1985. Cole will remain at the helm of the company at its head office in Redlands, California. Five Ten's entire team of 37 employees is expected to remain on board.

The “brand of the brave” should reach sales of about €16 million this year, excluding its business with distributors in Japan and South Korea. With these two countries, Five Ten's sales are split almost equally among North America, Asia and Europe.

Launched about two decades ago, Five Ten's European business is supervised from an office in Belgium, employing six people and dealing with distributors and agents in about 30 countries. The brand's European sales are set to reach just over €6 million this year, up by more than 30 percent, particularly due to fast-growing demand in the cycling market.

Five Ten's largest European markets are the U.K., France, Germany and Italy. The general manager of the European unit is Wally Barker, Five Ten's chief financial officer, based in California, but the operations are managed by Anne Le Pollès.

Herbert Hainer, chief executive of the Adidas Group, said that the performance-oriented brand fits neatly with the offering and approach of the German company in the outdoor market. While Five Ten will remain largely independent, the infrastructure of the Adidas Group will support Five Ten's development in international markets. Adidas further spotted some opportunities to improve Five Ten's sourcing, sales and logistics.

The acquisition comes as the Adidas brand itself continues to blaze ahead in the outdoor category. It is moving rapidly toward a target of reaching sales of €500 million in the outdoor market by 2015 with organic growth. Outdoor was the Adidas brand's fastest growth category in the first nine months of this year, with sales up by almost 40 percent in this period, and on track to approach €300 million for the full year.

Hainer said that this growth was driven by footwear, which constitutes the largest product category for Adidas in the outdoor market. There was no suggestion that Adidas would reduce its own outdoor footwear offering after the acquisition of Five Ten. The chief executive added that the Adidas Group had no other plans for acquisitions in the outdoor market.

Adidas heightened its investments in the outdoor category in 2008 and has since built up a dedicated team of about 70 people at its head office, headed by Rolf Reinschmidt. It started with the German-speaking countries and then moved on to other markets in the last three years.

Adidas Outdoor is now moving into the second phase of its seven-year plan. This recently included a retail launch in about 300 stores in the U.S. market, where the Adidas Outdoor range is distributed by Agron. Two months ago the brand opened its first Adidas Outdoor store in Harbin, China.

The acquisition of Five Ten was unveiled as the Adidas Group published its results for the third quarter. Its sales increased by 8.0 percent to €3,744 million, equivalent to an increase of 13 percent in constant currencies, and its net profit jumped by 14.1 percent to €303 million for the quarter.