Michael Kors To Buy Gianni Versace In $2.12 Bln Deal

(RTTNews) - Michael Kors Holdings Limited (KORS), a global fashion luxury group, said that it agreed to acquire all of the outstanding shares of Italian luxury fashion house Gianni Versace S.p.A. for a total enterprise value of 1.83 billion euros or approximately US$2.12 billion. Capri Holdings Limited (CPRI) is the new name to be adopted by Michael Kors Holdings Limited upon the closing of the acquisition.

John Idol, Chairman and Chief Executive Officer of Michael Kors Holdings Limited, said, "The acquisition of Versace is an important milestone for our group. Versace was founded in 1978. .... We are excited to have Versace as part of our family of luxury brands, and we are committed to investing in its growth. With the full resources of our group, we believe that Versace will grow to over US$2.0 billion in revenues."

Michael Kors noted that Versace's management team will continue to be led by Chief Executive Officer, Jonathan Akeroyd.

The acquisition of Versace is expected to deliver a number of benefits for our Company, including opportunity to help grow group's revenues to US$8.0 billion in the long-term.

The company believes that the acquisition of Versace enhances the company's economic value and will drive improved long-term shareholder value by accelerating long-term revenue and earnings per share growth potential. On a non-GAAP basis the acquisition is expected to be dilutive to earnings per share in the high-single digits in fiscal 2020, accretive in the low-single digits in fiscal 2021, and accretive in the high-single digits in fiscal 2022.

The transaction is not subject to a financing condition. The cash portion of the purchase price is expected to be funded by a combination of cash on hand, drawings under the company's existing revolving credit facility, and committed underwritten bank term loans from our advisors JPMorgan Chase Bank, N.A. and Barclays.

The Versace family will also receive 150 million euros of the purchase price in shares of Capri Holdings Limited. The transaction is expected to close in the company's fourth fiscal quarter, subject to specified closing conditions, including the receipt of required regulatory approvals.