2023-08-10 07:02:07 ET
Tapestry ( NYSE: TPR ) announced that it struck a deal to acquire Capri Holdings Limited ( NYSE: CPRI ) for $57.00 per share in cash. The deal will have a total enterprise value of approximately $8.5B.
The acquisition is noted to bring together six highly complementary brands with global reach, powered by Tapestry's ( TPR ) data-rich customer engagement platform and direct-to-consumer operating model. The combined sales of the two companies is in excess of $12B and the two have a combined presence in over 75 countries.
The combination of Coach, Kate Spade, and Stuart Weitzman together with Versace, Jimmy Choo, and Michael Kors is said to create a new powerful global luxury house that is anticipated to deliver immediate value to Tapestry ( TPR ) shareholders.
The deal is forecast to be immediately accretive on an adjusted basis and includes more than $200M in expected run-rate cost synergies within three years of deal closing.
"Further, our diversified, strong, and consistent cash flows will allow us to continue to invest in our business and rapidly pay down debt – aligned with our commitment to maintaining an investment grade rating – while returning capital to shareholders, including today’s announced 17% increase in our dividend per share. Overall, we are disciplined financial operators and allocators of capital with a relentless drive to deliver meaningful shareholder value."
The Tapestry-Capri transaction is not subject to a financing condition. Tapestry has secured $8.0B in fully committed bridge financing from Bank of America N.A. and Morgan Stanley Senior Funding, Inc. The purchase price of approximately $8.5 billion is expected to be funded by a combination of senior notes, term loans, and excess Tapestry cash, a portion of which will be used to pay certain of Capri’s existing outstanding debt.
Shares of Tapestry ( TPR ) fell 4.0% in premarket action on Thursday, while Capri Holdings ( CPRI ) skied 35.88% to $47.05.
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Tapestry confirms $8.5B deal to acquire Capri Holdings