Phillips-Van Heusen Corporation to Acquire Tommy Hilfiger B.V. for Approximately $3.0 Billion
Phillips-Van Heusen Corporation, New York announced a definitive agreement for PVH to acquire Tommy Hilfiger B.V., which is controlled by funds affiliated with Apax Partners L.P., for total consideration of EUR 2.2 billion (approximately $3.0 billion) plus the assumption of EUR 100 million in liabilities. The consideration includes EUR 1.924 billion in cash and EUR 276 million in PVH common stock. The combination will create one of the world's largest and most profitable apparel companies; a global business with combined revenue of approximately $4.6 billion.
PVH expects the transaction to be immediately accretive to earnings per share before one-time costs and accounting charges. PVH expects earnings accretion of $0.20 to $0.25 per share on a non-GAAP basis in the 2010 fiscal year ending January 30, 2011 and earnings accretion of $0.75 to $1.00 per share in the 2011 fiscal year ending January 29, 2012. The 2010 earnings accretion estimate excludes one-time cash integration costs and transaction expenses of approximately $100 million related to the transaction, or approximately $1.00 per share. PVH expects to realize approximately $40 million of annualized cost synergies in the transaction.
The closing of the transaction is subject to receipt of financing and other customary conditions, including receipt of required regulatory approvals, which PVH does not anticipate difficulty in obtaining. The transaction does not require a PVH stockholder vote and is expected to close during PVH's fiscal 2010 second quarter.
"This is a unique opportunity to bring together two premier companies, each with iconic brands, which will deliver enhanced opportunities for our stockholders, business partners, customers and employees as we leverage a combined global platform in the years ahead," said Emanuel Chirico, Chairman and Chief Executive Officer of PVH. "During almost four years as a private company under the leadership of Fred Gehring and his team, Tommy Hilfiger has continued to gain momentum in Europe and Asia, while successfully rebuilding its business in North America, producing impressive overall performance, and generating strong profitability and free cash flow even during the recession."