PVH to acquire its Australian JV partner Gazal
By Prachi Singh
Feb. 21, 2019
PVH Corp. has entered into a definitive agreement to acquire Gazal Corporation Limited that it does not already own for 6 Australian dollars per share. The company said, Gazal has been PVH’s long term partner in Australia and if the acquisition is consummated, PVH will acquire its joint venture with Gazal, “PVH Brands Australia Pty Limited”, which commenced doing business in 2014.
“I’m pleased that we have agreed to acquire Gazal. 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 statement.
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. The JV generated approximately 260 million Australian dollars in revenues on a twelve-month trailing basis as of July 2018.
The company added that aggregate net purchase price for the approximately 78 percent of Gazal shares being acquired is approximately 124 million Australian dollars, after taking into account the divestiture to a third party of Gazal’s owned office building and warehouse in Banksmeadow, New South Wales, which will take place shortly following the closing date of the acquisition.
PVH further said that the transaction is expected to result in a material increase to its 2019 earnings per share on a GAAP basis, as it expects to record a noncash gain to write-up its equity investments in Gazal and the JV to fair value. Excluding this noncash gain, the transaction is expected to be slightly accretive to 2019 earnings on a non-GAAP basis.
Picture credit:Gazal website