PVH Corp acquires its Australian subsidiary Gazal
today Feb 21, 2019
PVH Corp on Wednesday said it has made an offer to buy Australia's Gazal, as the U.S. company looks to expand its direct control of businesses operated under the Calvin Klein and Tommy Hilfiger brands globally.
Gazal and PVH first entered into a joint venture partnership back in 2014, forming PVH Brands Australia. The JV holds licenses for PVH’s Calvin Klein, Tommy Hilfiger and Van Heusen brands, as well as the Pierre Cardin, Bracks and Nancy Ganz brands in Australia, New Zealand and other parts of Oceania.
"PVH currently – and for many years – has had a successful business relationship with our Australian partners and would be pleased to bring them into the larger PVH family,” said Emanuel Chirico, Chairman and CEO, PVH Corp, in a press release.
“Gazal has enhanced the market position of our brands in Australia and New Zealand and we believe the region continues to offer significant growth over the next five years and aligns with our strategic priority to expand our direct control of businesses operated under the Calvin Klein and Tommy Hilfiger brands worldwide.”
With the deal set to close in the second quarter of 2019, PVH Corp said it has acquired the remaining interest in Gazal that it does not already own for A$6 per share, and the aggregate net purchase price for the 78% of Gazal shares being acquired is approximately A$124 million.
PVH affirmed that management at both Gazal and PVH would remain in their current roles for the next two years and would use approximately 25% of their existing Gazal equity to subscribe for an approximate 6% stake in the PVH subsidiary that is the parent company of the acquirer.
Looking ahead, the transaction is also expected lift PVH’s 2019 earnings per share, with the company adding it expects to "record a noncash gain to write-up its equity investments in Gazal and the JV to fair value."
PVH Brands Australia generated approximately A$260 million in revenues on a twelve month trailing basis as of July 2018.
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