Latham, Wachtell advise on Tapestry’s $8.5bn acquisition of Versace-owner Capri
Luxury merger also gives Tapestry access to Capri brands Jimmy Choo and Michael Kors
Latham & Watkins and Wachtell Lipton Rosen & Katz are advising on Coach-owner Tapestry’s proposed $8.5bn acquisition of luxury fashion business Capri Holdings.
Latham is advising Tapestry, while Wachtell is advising Capri Holdings, which owns brands including Versace, Jimmy Choo and Michael Kors.
The deal will create a fashion powerhouse with $12bn in annual sales, fuelled by six luxury brands that also include Kate Spade and Stuart Weitzman. The tie-up will save $200m over the next three years through lower operational costs and supply chain efficiencies. Tapestry’s all-cash offer of $57 a share is equivalent to a 59% premium on Capri’s average trading price over the past 30 days. The transaction is expected to close next year, subject to approval from Capri shareholders and regulators.
Joanne Crevoiserat, Tapestry’s CEO, said: “We’ve created a dynamic, data-driven consumer engagement platform that has fuelled our success, fostering innovation, agility and strong financial results. From this position of strength, we are ready to leverage our competitive advantages across a broader portfolio of brands.”
John Idol, chairman and CEO of Capri, added that by joining with Tapestry, it will have greater resources and capabilities to accelerate its global expansion while preserving “the unique DNA of our brands”.
Latham’s core, corporate deal team advising Tapestry was led by New York/Orange County partner Charles Ruck, New York partner Leah Sauter, and Bay Area partner Joshua Dubofsky, with Orange County associates Brian Umanoff, Taylor Ashton, Tiana Baghdikian, Jack Vanderford, Allison (AJ) Blair, Courtney Lem, Viva Jerónimo, Lexi Zintel, Danny Del Giorno, David Stepovich, and Jacob Kempf.
Morgan Stanley acted as Tapestry’s financial advisor, while Barclays provided financial advice to Capri. Tapestry is financing the deal through a bridge loan from Bank of America and Morgan Stanely, which it will repay with funds raised through a combination of senior bonds and term loans, as well as cash. Tapestry is due to release its 2023 financial results next week.
The latest luxury brand merger follows Gucci-owner Kering’s acquisition of perfume-maker Creed in June for an undisclosed fee. Clifford Chance advised Creed-backer BlackRock on the deal, while Sullivan & Cromwell advised Kering.
Latham was also involved in L’Oreal’s $2.5bn acquisition of luxury beauty brand Aēsop back in April. Latham advised L’Oreal, while Davis Polk & Wardwell advised Aēsop parent Natura & Co.