G-III Apparel Group, Ltd, a leading designer, manufacturer and marketer of branded apparel and accessories, and LVMH Moët Hennessy Louis Vuitton, the world’s leading high quality products group, today announced that they have entered into a definitive agreement under which G-III will acquire LVMH owned Donna Karan International, Inc., the parent of the Donna Karan and DKNY brands.
Valued at $650 million, subject to customary adjustments at closing, the transaction is expected to close in late 2016 or early 2017.
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.”
$75 millon common stock and $75 million seller note
G-III plans to fund the acquisition through new indebtedness, $75 million of newly issued G-III common stock for 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.
Once completed the purchase, Donna Karan and DKNY will add to the roster of G-III’s owned brands including: 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 also 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.
Diversifying the on top of G-III portfolio
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.”
Through the 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.