PVH takes control of Calvin Klein clothing with Warnaco buy
October 31, 2012 11:14 PM EST
PVH, which owns and makes formal wear and sportswear under the Calvin Klein brand, will gain the underwear and jeans businesses that have been under license to Warnaco since 1997.
PVH expects the combined businesses to generate $8 billion in revenue for the full year.
"Having direct global control of the two largest apparel categories for Calvin Klein -- jeans and underwear -- will allow us to unlock additional growth potential of this powerful designer brand," PVH Chief Executive Emanuel Chirico said in a statement on Wednesday.
Warnaco, which also sells products under brands such as Speedo, Chap, Warner's and Olga, operated 1,759 Calvin Klein retail stores worldwide as of December 31, 2011.
PVH, which also owns the Tommy Hilfiger brand, is offering Warnaco shareholders $51.75 in cash and 0.1822 of a share of PVH common stock for each Warnaco share.
Based on PVH's last closing stock price, the per share value of the deal is $68.43, a 34 percent premium over the last closing price of Warnaco common stock.
The deal value is based on Warnaco's 40.87 million shares outstanding as of August 1.
Warnaco's Calvin Klein businesses will be run by Tom Murry, chief executive of Calvin Klein, following the close of the deal in 2013.
PVH, which expects the deal to add 35 cents to adjusted earnings per share in the first year after it closes, said it will incur one-time costs of $175 million over three years.
PVH also said it expects its full-year profit to be at the top end of the range.
The company, which competes with Ralph Lauren Corp
Shares of PVH closed at $91.50 while Warnaco's stock closed at $50.88 on Friday on the New York Stock Exchange. (Reporting by Siddharth Cavale and Sakthi Prasad in Bangalore; Editing by Erica Billingham,; Sriraj Kalluvila)
Most Popular Slideshows
- Taylor Swift Named Forbes' Second Highest Paid Country Musician [PHOTOS]
- Forever Lost: Indescribable Anguish for Malaysia Airlines MH17 Families, Remains of Some Victims May Never Be Found (PHOTOS)
- Global Aviation Accidents: UN to Form Safety Task Force, Gov'ts Should Share Intelligence Info to Avert Future Incidents on Flying Over Warzones (PHOTOS)
- PageSix: Beyonce & Jay Z Union is Not About Love, All About Business & the Brand
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- Samsung Galaxy S5 Alpha Leaks Online: Release Date, Five Features to Wait for New Smart Phone
- Photos of Motorola Moto X+1 Prototype and Specs Leak Online, Release Date, Four Fresh Features Revealed
- Freshly Leaked Apple iPad Air 2 Cases Confirm Touch ID Sensor; Release Date, Limited Specs and Price Listed
- Sony Xperia Z3: Release Date, Five Features to Expect from New Android Smart Phone
- Moto X Android 4.4.4 KitKat Update Guide: Schedule and How to Install
- Top Surprising Features Of iOS 8
- Top 4 Reasons Why iPhone 6 Will Hit Big Soon After its Sept 2014 Release Date