Phillips-Van Heusen Corporation to Acquire Tommy Hilfiger B.V. for Approximately $3.0 Billion
Mr. Christian Stahl, a partner at Apax Partners, said: "Apax and PVH have a history of successful partnerships from the time we supported PVH in its acquisition of Calvin Klein. The management team of Tommy Hilfiger has done an outstanding job in growing the business in a very difficult economic time. We are very pleased that these two great companies and management teams are coming together now to form one of the most powerful global fashion businesses and that we will be a significant stockholder in PVH going forward. PVH has a track record of smoothly integrating world class brands and creating a strong platform for significant future growth. They proved it with Calvin Klein, and we look forward to a similar success with Tommy Hilfiger."
Tommy Hilfiger's revenue for its fiscal year ending March 31, 2010 is expected to be approximately $2.25 billion, with earnings before interest and taxes of approximately $280 million, which excludes approximately $40 million of impairment charges, and depreciation and amortization of approximately $100 million. Approximately 46% of this revenue is expected to be derived from wholesale sales, 52% from retail sales, and 2% from licensing income, with 66% of total revenue from international sources and 34% from the U.S. Tommy Hilfiger has approximately 1,000 stores globally.
Terms and Financing of the Transaction
PVH expects to finance the EUR 1.924 billion cash portion of the acquisition and refinance its $300 million of existing senior unsecured notes with a combination of approximately $385 million of cash on hand, $2.45 billion of senior secured debt (including an undrawn revolver of $450 million), $600 million of senior unsecured notes and $200 million in PVH perpetual convertible preferred stock described below. In addition, PVH currently plans to raise approximately $200 million in common stock through a public offering prior to closing.