G-III Apparel Group to Acquire Marc Jacobs Operating Business in $500M Deal
GIII sits 46% above its 52-week low of $20.33.
Summary
G-III Apparel Group is acquiring the Marc Jacobs operating business for $500 million, forming a joint venture for the brand's intellectual property, a major strategic move expected to be dilutive initially but accretive long-term.
Key Events · M&A and Partnerships · GIII
-
Acquisition of Marc Jacobs Operating Business
G-III Apparel Group will acquire and manage the global operating business of the Marc Jacobs brand from LVMH.
-
$500 Million Investment
G-III will fund its approximately $500 million investment using cash on hand and borrowings under its revolving credit facility.
-
Joint Venture for Intellectual Property
A newly formed 50/50 joint venture with WHP Global will retain ownership of Marc Jacobs' intellectual property.
-
Long-Term Licensing Agreement
G-III will operate the Marc Jacobs business under a long-term exclusive license from the joint venture, with an initial term through December 2041 and multiple 5-year renewal options.
Analysis · GIII · Manufacturing
G-III Apparel Group is making a significant strategic move by acquiring the global operating business of the iconic Marc Jacobs brand for approximately $500 million. This transaction, structured as a joint venture for intellectual property and a long-term licensing agreement for operations, aims to diversify G-III's portfolio and drive long-term value. While expected to be dilutive in the first year, the company anticipates accretion thereafter. This comes after a period of declining profitability and internal control issues, making the successful integration and performance of Marc Jacobs critical for G-III's future.
At the time of this filing, GIII was trading at $29.72 on NASDAQ in the Manufacturing sector, with a market capitalization of approximately $1.3B. The 52-week trading range was $20.33 to $34.83. This filing was assessed with neutral market sentiment and an importance score of 8 out of 10.