G-III Apparel Group, Ltd. (NASDAQ:GIII), a leading designer,
manufacturer and marketer of branded apparel and accessories, and
LVMH Moët Hennessy Louis Vuitton (LVMH.PA), the world’s leading
high quality products group, today announced that they have entered
into a definitive agreement under which G-III will acquire Donna
Karan International, Inc., parent of the Donna Karan and DKNY
brands and owned by LVMH, in a transaction with an enterprise value
of $650 million, subject to customary adjustments at closing. The
transaction is expected to close in late 2016 or early 2017.
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Morris Goldfarb, Chairman, Chief Executive Officer and President
of G-III, said, “Donna Karan International is an iconic global
fashion company. Its lifestyle aesthetic resonates well with
consumers throughout the world. We are excited to build upon its
strong foundation as we seek to capitalize on a significant market
opportunity. Donna Karan brings increased scale and
diversification, while providing incremental growth on top of our
portfolio of some of the best fashion brands in the world. We
believe we are well positioned to create and sustain additional
value for our shareholders, partners, and customers.”
Toni Belloni, Group Managing Director of LVMH, said, “Donna
Karan International has a deep heritage, global recognition, and
renewed energy. We believe the DKNY brand has a dynamic position in
the market, and when G-III approached us about acquiring the brand,
we concluded that the time was right and that G-III was the right
steward going forward. We are pleased to have reached an agreement
with G-III, a company that has the expertise and capabilities to
broaden the brand’s distribution and take it to its next level of
success. We are grateful to CEO Caroline Brown, creative directors
Maxwell Osborne and Dao-Yi Chow, and the entire management and
design teams for the strategic actions that created a platform to
support DKNY’s continued growth.”
G-III does not plan to update its financial guidance to reflect
the effect of the acquisition until it has closed, although G-III
further noted that, excluding purchase accounting charges and other
adjustments, it preliminarily expects the acquisition to be
dilutive in the fiscal year ending January 31, 2018, and accretive
thereafter.
G-III plans to fund the acquisition through new indebtedness,
$75 million of newly issued G-III common stock to LVMH, and a $75
million 6½ year seller note. In connection with the
acquisition, G-III has obtained financing commitments
from Barclays and JPMorgan Chase Bank, N.A. for
a $525 million ABL credit facility and a $450
million 6-year term loan. The closing of the transaction is
not subject to financing conditions.
Barclays is acting as exclusive financial advisor
to G-III. Norton Rose Fulbright US LLP and Simpson
Thacher & Bartlett LLP are acting as legal advisors
to G-III. Barack Ferrazzano Kirschbaum & Nagelberg LLP is
acting as legal advisor to LVMH.
About G-III
G-III is a leading manufacturer and distributor of apparel and
accessories under licensed brands, owned brands and private label
brands. G-III’s owned brands include Vilebrequin, Andrew Marc, Marc
New York, Bass, G.H. Bass, Weejuns, G-III Sports by Carl Banks,
Eliza J, Black Rivet and Jessica Howard. G-III has fashion licenses
under the Calvin Klein, Tommy Hilfiger, Karl Lagerfeld, Kenneth
Cole, Cole Haan, Guess?, Jones New York, Jessica Simpson, Vince
Camuto, Ivanka Trump, Ellen Tracy, Kensie, Levi's and Dockers
brands. Through our team sports business, G-III has licenses with
the National Football League, National Basketball Association,
Major League Baseball, National Hockey League, Hands High, Touch by
Alyssa Milano and more than 100 U.S. colleges and universities.
G-III also operates retail stores under the Wilsons Leather, Bass,
G.H. Bass & Co., Vilebrequin and Calvin Klein Performance
names.
Statements concerning G-III's business outlook or future
economic performance, anticipated revenues, expenses or other
financial items; product introductions and plans and objectives
related thereto; and statements concerning assumptions made or
expectations as to any future events, conditions, performance or
other matters are "forward-looking statements" as that term is
defined under the Federal Securities laws. Forward-looking
statements are subject to risks, uncertainties and factors which
include, but are not limited to, reliance on licensed product,
reliance on foreign manufacturers, risks of doing business abroad,
the current economic and credit environment, the nature of the
apparel industry, including changing customer demand and tastes,
customer concentration, seasonality, risks of operating a retail
business, customer acceptance of new products, the impact of
competitive products and pricing, dependence on existing
management, possible disruption from acquisitions and general
economic conditions, as well as other risks detailed in G-III's
filings with the Securities and Exchange Commission. G-III assumes
no obligation to update the information in this release.
About LVMH
LVMH Moët Hennessy Louis Vuitton is represented in Fashion and
Leather Goods by a portfolio of brands that includes Louis Vuitton,
Céline, Loewe, Kenzo, Givenchy, Thomas Pink, Fendi, Emilio Pucci,
Donna Karan, Marc Jacobs, Berluti, Nicholas Kirkwood and Loro
Piana. Its Wines and Spirits division includes Moët & Chandon,
Dom Pérignon, Veuve Clicquot Ponsardin, Krug, Ruinart, Mercier,
Château d’Yquem, Domaine du Clos des Lambrays, Château Cheval
Blanc, Hennessy, Glenmorangie, Ardbeg, Wenjun, Belvedere, Chandon,
Cloudy Bay, Terrazas de los Andes, Cheval des Andes, Cape Mentelle,
Newton et Numanthia. LVMH is present in the Perfumes and Cosmetics
sector with Parfums Christian Dior, Guerlain, Parfums Givenchy,
Parfums Kenzo, Perfumes Loewe as well as other promising cosmetic
companies (BeneFit Cosmetics, Make Up For Ever, Acqua di Parma and
Fresh). LVMH is also active in selective retailing as well as in
other activities through DFS, Sephora, Le Bon Marché, la
Samaritaine and Royal Van Lent. LVMH's Watches and Jewelry division
comprises Bulgari, TAG Heuer, Chaumet, Dior Watches, Zenith, Fred,
Hublot and De Beers Diamond Jewellers Ltd, a joint venture created
with the world’s leading diamond group.
Certain information included in this release is forward looking
and is subject to important risks and uncertainties and factors
beyond our control or ability to predict, that could cause actual
results to differ materially from those anticipated, projected or
implied. It only reflects our views as of the date of this
presentation. No undue reliance should therefore be based on any
such information, it being also agreed that we undertake no
commitment to amend or update it after the date hereof.
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G-III Investor
RelationsJames PalczynskiICR, Inc.+1
203-682-8229orNeal S. Nackman, Chief Financial
OfficerG-III+1 212-403-0500LVMHAnalysts and Investors:Chris
HollisLVMH+ 33 1 4413 2122Media:US:James
Fingeroth/Molly Morse/Anntal SilverKekst+1
212-521-4800orFrance:Michel Calzaroni/Olivier Labesse/Sonia
Fellmann/Hugues SchmittDGM Conseil+ 33 1 4070
1189orUK:Hugh Morrison / Charlotte McMullenMontfort
Communications+44 7921 881 800orItaly:Michele
Calcaterra/ Matteo SteinbachSEC and Partners+39 02
6249991
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