Capri Holdings (NYSE: CPRI), the luxury fashion group behind brands like Versace, Jimmy Choo, and Michael Kors, surged at the time of writing on Thursday after its acquisition by Tapestry (NYSE: TPR). Tapestry will pay Capri shareholders $57.00 per share in cash, with the deal valued at around $8.5 billion. The acquisition is expected to close next year. There was a strong buzz that Tapestry may be interested in acquiring Capri Holdings.
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With this acquisition, Tapestry will add more brands to its portfolio and unite six iconic brands. The company stated in its press release that the combined company “generated over $12 billion in revenue and nearly $2 billion in adjusted operating profit in the prior fiscal year.”
Tapestry’s COO and CFO Scott Roe commented, “…this combination is immediately accretive on an adjusted basis and enhances Tapestry’s total shareholder return. This includes more than $200 million in expected run-rate cost synergies within three years of the deal closing.”
In addition, Tapestry’s Board of Directors also approved hiking its dividend per share by 17% to $1.40 per share.
CPRI stock has not fared well this year and the stock has crashed by more than 40%.
