Tommy Hilfiger Corporation Announces Agreement to Be Acquired For Approximately $1.6 Billion
Submitted by publisher on Fri, 12/23/2005 - 10:46.
Articles | Celebrity News | Dining/Food Articles | Schools | Sports Articles
Source: Tommy Hilfiger Corporation
12/31/1969 - 17:00
Tommy Hilfiger Corporation Announces Agreement to Be Acquired By Funds Advised By Apax Partners for $16.80 Per Share or Approximately $1.6 Billion
Tommy Hilfiger Corporation (NYSE:TOM) and Apax Partners, a leading global private equity firm, announced today a definitive agreement under which Funds advised by Apax Partners will acquire Tommy Hilfiger Corporation in a merger at a price of $16.80 per share in cash, representing a transaction value of approximately $1.6 billion.David F. Dyer, Chief Executive Officer of Tommy Hilfiger Corporation, said, "We believe this transaction is a validation of the brand and the global opportunities that lie ahead. Since late 2003, we have been focused on improving operating performance and executing on long-term plans to regain our position as a high-growth, high-return enterprise. We made considerable strides to this end, while understanding that there was still work ahead of us and that our progress to date put us in a strong position to consider other ways to unlock the value of our brand and franchise.
As a result, in August the Board retained J. P. Morgan Securities Inc. to assist the Company in reviewing its strategic alternatives. This review included careful consideration of a variety of options, including recapitalizations, restructurings, share buybacks and other measures to create value, including a possible sale of the Company. As part of this effort, the Board undertook a wide-ranging auction process, ultimately resulting in the unanimous determination by the Company's independent directors that the offer from Apax Partners was in the best interests of the Company and our shareholders."
"Bottom line, it was a thorough and fair process," said Mario L. Baeza, Lead Director of Tommy Hilfiger Corporation.
Michael Phillips, Partner, Apax Partners Worldwide LLP, said, "Apax Partners has a long track record of successful investments in the retail and consumer sector, and we believe the flexibility that will be afforded Tommy Hilfiger Corporation as a private company with a powerful global brand will enable the business to grow on both operational and financial levels."
Tommy Hilfiger, the Company's Founder, Honorary Chairman, and Principal Designer said, "This is an exciting new phase in our evolution as a global lifestyle company. I am also pleased that in addition to ensuring the strength of the Tommy Hilfiger brand at the higher end of the spectrum, we can continue to move ahead with the already successful global expansion. I will continue to be actively involved in the business and believe that Apax Partners is the ideal partner to help us in our next stage of growth."
Mr. Hilfiger has agreed with Apax Partners to enter into a new employment agreement upon consummation of the transaction, pursuant to which he will continue as Principal Designer as well as Chairman of the Strategy and Design Board. Fred Gehring, Chief Executive Officer of Tommy Hilfiger Europe, and Ludo Onnink, Chief Financial Officer of Tommy Hilfiger Europe, have also agreed with Apax Partners to enter into new employment agreements upon closing. At that time, having completed his effort to realize value for Tommy Hilfiger shareholders, Mr. Dyer will leave Tommy Hilfiger Corporation and Mr. Gehring will assume the leadership of the Company.
The transaction is expected to close in Spring 2006 and is subject to shareholder approval, the successful completion by the Company of cash tender offers/consent solicitations for the Company's outstanding 6.85% Notes due 2008 and 9% Senior Bonds due 2031, delivery of committed financing as well as customary regulatory and other closing conditions.
J. P. Morgan Securities Inc. acted as exclusive financial advisor to Tommy Hilfiger Corporation and rendered a fairness opinion in connection with the transaction. Wachtell, Lipton, Rosen & Katz acted as legal counsel to Tommy Hilfiger Corporation. Citigroup Corporate and Investment Banking and Credit Suisse First Boston acted as financial advisors to Apax Partners. Skadden, Arps, Slate, Meagher & Flom LLP and Clifford Chance US LLP acted as legal counsel to Apax Partners. In addition, Ernst & Young LLP provided accounting and tax advisory services to Apax Partners. Citigroup Corporate and Investment Banking and Credit Suisse First Boston have provided committed financing to support the acquisition and will be assembling a syndicate which is expected to include Fortis Bank, the Company's existing relationship bank in Europe, at a senior level.
About Tommy Hilfiger Corporation
Tommy Hilfiger Corporation, through its subsidiaries, designs, sources and markets men's and women's sportswear, jeanswear and childrenswear. The Company's brands include Tommy Hilfiger and Karl Lagerfeld. Through a range of strategic licensing agreements, the Company also offers a broad array of related apparel, accessories, footwear, fragrance, and home furnishings. The Company's products can be found in leading department and specialty stores throughout the United States, Canada, Europe, Mexico, Central and South America, Japan, Hong Kong, Australia and other countries in the Far East, as well as the Company's own network of outlet and specialty stores in the United States, Canada and Europe.
About Apax Partners
Apax Partners is one of the world's leading private equity investment groups, operating across the United States, Europe, Israel and Asia. Apax Partners has raised or advised approximately US $20 billion around the world. With more than 30 years of direct investing experience, Funds advised by Apax Partners provide long-term equity financing to build and strengthen world-class companies. It pursues a multi-stage equity investment strategy, investing in late venture, growth capital and buyouts. Examples of retail and consumer investments include: Phillips-Van Heusen, Tommy Bahama, Spyder Active Sports, Dollar Tree Stores, The Children's Place, Charlotte Russe and Focus Wickes. Funds advised by Apax Partners invest in companies across its global sectors of Retail & Consumer, Tech & Telecom, Media, Healthcare and Financial & Business Services.
