===Capri Holdings (CPRI) to be acquired by Tapestry (TPR) for $57.00 per share or approx. $8.5 bln

 

Tapestry (TPR) confirms definitive agreement to acquire Capri Holdings for $57.00 per share in cash (total enterprise value of approx. $8.5 bln); expected to be immediately accretive

• Transaction Details: The Boards of Directors of each of Tapestry, Inc. and Capri Holdings Limited have unanimously approved the transaction. The transaction is anticipated to close in calendar year 2024, subject to approval by the Capri Holdings shareholders, as well as the receipt of required regulatory approvals, and other customary closing conditions. The all-cash offer for Capri Holdings of $57.00 per share represents a premium of ~59% to the 30-day volume weighted average price ending August 9, 2023. The total enterprise value of the transaction of ~$8.5 bln represents a 9x adjusted EBITDA multiple on a trailing-twelve-month basis, or 7x including expected synergies. The transaction is not subject to a financing condition. Tapestry has secured $8.0 bln in fully committed bridge financing from Bank of America N.A. and Morgan Stanley Senior Funding, Inc. The purchase price of ~$8.5 bln is expected to be funded by a combination of senior notes, term loans, and excess Tapestry cash, a portion of which will be used to pay certain of Capri's existing outstanding debt. Importantly, Tapestry has engaged with the rating agencies and is committed to a solid Investment Grade Rating. Tapestry will suspend its share repurchase activity to prioritize de-leveraging via debt reduction and anticipates reaching a leverage ratio of below 2.5x Debt/EBITDA within 24 months post-close. Furthermore, Tapestry is instituting a long-term leverage target of under 2.5x Debt/EBITDA.
• Tapestry, Inc. is scheduled to report fiscal fourth quarter and full year 2023 results on Thursday, August 17th. Tapestry expects to report annual revenue and earnings per diluted share consistent with its previously issued guidance range. Due to the announcement of the transaction, Capri Holdings Limited will not hold its previously scheduled earnings call and will publish its financial results for the first quarter of fiscal 2024 after the market close today, August 10th, via press release.
• Capri Holdings expects to report revenue and earnings per diluted share for its first fiscal quarter 2024 slightly above its previously issued guidance range. Capri Holdings does not intend to provide a financial outlook moving forward.
• Tapestry's Board of Directors approving a 17% increase to its quarterly dividend per share, resulting in an anticipated payout of $1.40 per share or ~$325 mln in Fiscal Year 2024.