Alpargatas SA, the Brazilian owner of flip-flop sandal maker Havaianas, has reached an agreement to buy as much as 49.9 percent of US direct-to-consumer footwear brand Rothy’s Inc.

Alpargatas and Rothy’s said in a statement Monday that the transaction will involve a two-step process. First, Alpargatas will acquire shares worth $200 million, followed by tender offer to acquire stock worth about $275 million from current Rothy’s shareholders, according to the statement.

Rothy’s, which will have a valuation of $1 billion with the transaction, will continue to operate independently, the companies said.

“The partnership brings together two vertically-integrated leaders and innovators in the footwear industry with international manufacturing capacity and a shared commitment to social and environmental responsibility,” according to the statement.

Rothy’s had been in discussions to raise funding that could value it at more than $1 billion, Bloomberg News reported in October. Alpargatas, whose shares have fallen 7.9 percent this year, has a market value of $3.6 billion.

Co-founded by Roth Martin and former M&A banker Stephen Hawthornthwaite, Rothy’s had last raised funding in 2019, when it received $35 million from Goldman Sachs Group Inc.’s asset management unit. The company was valued at $700 million at the time, people familiar with the matter have said.

With its start in women’s shoes that were famously worn by Meghan Markle, Rothy’s now sells footwear, bags and accessories for women, men and children. The company’s shoes are made from recycled plastic and are machine washable.

By Crystal Tse and Katie Roof

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