PVH Corp. (NYSE: PVH) and The Warnaco Group, Inc. (NYSE: WRC) today announced that they have entered into a definitive merger agreement pursuant to which PVH will acquire Warnaco and holders of Warnaco common stock will receive $51.75 in cash and .1822 of a share of PVH common stock for each share of Warnaco common stock. The transaction values Warnaco at approximately $2.9 billion. With over $8 billion in pro forma revenue, PVH will be one of the largest and most profitable global branded lifestyle apparel companies in the world, with a diversified portfolio of iconic brands led by Calvin Klein and Tommy Hilfiger, as well as heritage brands – Van Heusen, IZOD, ARROW, Bass, Speedo, Olga and Warner’s.
Based on PVH’s last closing stock price, the per share value of the consideration to be received by Warnaco stockholders is $68.43, a 34% premium over the last closing price of Warnaco common stock. The merger, which has been unanimously approved by the Boards of Directors of both companies, is expected to close in early 2013, at which time the former Warnaco stockholders will own approximately 10% of the outstanding common stock of PVH. In addition, Helen McCluskey, Warnaco’s President and Chief Executive Officer, is expected to join PVH’s Board of Directors. The Warnaco Board of Directors has unanimously recommended that Warnaco stockholders approve the transaction.
PVH anticipates approximately $100 million of annual run rate synergies from the transaction, which will be fully realized over three years. In order to achieve these synergies, PVH expects to incur one-time costs of approximately $175 million over three years. PVH expects the transaction to be $0.35 per share accretive to earnings in the first full year (fiscal 2013, if the deal closes when currently anticipated), excluding one-time integration costs and transaction expenses but including the effect of the potential loss of a license. When the $100 million of expense synergies are fully realized in year 3, PVH would expect the transaction to be accretive to earnings by $1.00 per share, excluding one-time integration costs and including the effect of the potential loss of a license.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV