In the big news of the week, Michael Kors Holdings Ltd. agreed to buy Jimmy Choo Plc for about £896 million ($1.2 billion), it was announced on Tuesday, July 25. The price represented a premium of 18% over Monday’s stock close. The price is equal to about 17.5 times Jimmy Choo’s adjusted Ebitda for 2016, reported the financial press.
The boards of both companies have approved the deal, they said in a statement Tuesday.
Michael Kors, Honorary Chairman and Chief Creative Officer of Michael Kors, said, “Jimmy Choo is a premier fashion luxury house that offers distinctive footwear, handbags and other accessories. We admire the glamorous style and trendsetting nature of Jimmy Choo designs. We look forward to welcoming Jimmy Choo to our luxury group.”
Since its inception in 1996, the company has offered distinctive, glamorous and fashion-forward products, with luxury footwear at the heart of its unique brand DNA, said the Michael Kors statement, also citing Jimmy Choo’s balanced distribution network and strong presence in Europe, the Middle East, the Americas and Asia and its online platform.
Kors also says it sees the acquisition as the opportunity to grow Jimmy Choo sales to $1 billion.