Patagonia's new shareholder is the Earth

Patagonia's founder Yvon Chouinard announced plans to transfer ownership of the outdoor clothing retailer to the Patagonia Purpose Trust and the Holdfast Collective.

Why it's the BFD: It doesn't happen often, but Patagonia joins other companies controlled by mission-driven shareholders such as the Hershey Company, which is majority owned by the Hershey Trust Company, and REI Co-op.

• Patagonia's valuation was pegged at $3 billion, according to the New York Times — representing a premium over competitors like Lands' End and VF Corp., though still in range of those companies.

Details: After nixing a sale or public offering, Patagonia decided to stay private, remain a B Corp, and transfer ownership to a trust and nonprofit.

• Profits will go toward curtailing climate change, to the tune of a $100 million dividend per year.

The intrigue: "We needed to find a way to put more money into fighting the crisis while keeping the company’s values intact," Chouinard wrote in a letter posted on Patagonia's website.

• "One option was to sell Patagonia and donate all the money. But we couldn’t be sure a new owner would maintain our values or keep our team of people around the world employed," he said.
• The company also eschewed going public, citing "too much pressure to create short-term gain at the expense of long-term vitality and responsibility," Chouinard said.

Of note: Clif Bar faced the same dilemma, with founder Gary Erickson backing out of a deal to sell the business in 2000 for $120 million to Quaker Oats and to instead focus on sustainability.

• Erickson seemed intent on keeping the company independent and private, but it ended up being sold to Mondelez for $2.9 billion earlier this summer.

The bottom line: “We’re making Earth our only shareholder. I am dead serious about saving this planet," Chouinard said in a statement.