Under the terms of the transaction, Capri Holdings shareholders will receive US$57.00 per share in cash for a total enterprise value of approximately US$8.5 billion.
Tapestry noted that the two companies have complementary operations in Asia and Europe and the acquisition broadens its product offering in lifestyle categories, particularly footwear and ready-to-wear.
Tapestry has secured US$8 billion in financing for the acquisition from Bank of America N.A. and Morgan Stanley Senior Funding, with the full purchase price to be funded by a combination of senior notes, term loans, and excess Tapestry cash, a portion of which will be used to pay Capri’s existing outstanding debt.
Tapestry CEO Joanne Crevoiserat said: “We are excited to announce the acquisition of Capri Holdings – uniting six iconic brands and exceptional global teams. Tapestry is an organisation with a passion for building enduring brands through superior design and craftsmanship and an unwavering focus on our customers. Importantly, we’ve created a dynamic, data-driven consumer engagement platform that has fuelled our success, fostering innovation, agility and strong financial results.
“From this position of strength, we are ready to leverage our competitive advantages across a broader portfolio of brands. The combination of Coach, Kate Spade and Stuart Weitzman together with Versace, Jimmy Choo and Michael Kors creates a new powerful global luxury house, unlocking a unique opportunity to drive enhanced value for our consumers, employees, communities, and shareholders around the world.”
John D. Idol, Chairman and CEO of Capri Holdings, added: “Today’s announcement marks a major milestone for Capri. It is a testament to all that our teams have achieved in building Versace, Jimmy Choo and Michael Kors into the iconic and powerful luxury fashion houses they are today. We are confident this combination will deliver immediate value to our shareholders.
“It will also provide new opportunities for our dedicated employees around the world as Capri becomes part of a larger and more diversified company. By joining with Tapestry, we will have greater resources and capabilities to accelerate the expansion of our global reach while preserving the unique DNA of our brands.”