Amsterdam Apparel conglomerate Phillips-Van Heusen announced a definitive agreement to acquire Tommy Hilfiger B.V. from British private equity firm Apax Partners for approximately 2.2 billion euros, or $3.0 billion in cash and stock. The deal includes the assumption of 100 million euros ($138 million) in liabilities, Phillips-Van Heusen said.
“Tommy Hilfiger fits all of our acquisition criteria: a strong brand, superior management, highly profitable, immediately accretive to earnings, and focused on international growth,” said Emanuel Chirico, chairman and CEO of Phillips-Van Heusen. “We also believe that our cultures are highly compatible. All of this makes us confident that this compelling combination will generate strong revenue growth, high operating margins and substantial free cash flow, which should enable us to reduce debt very quickly while continuing to grow the companies' respective brands and businesses."
With the acquisition, Phillips-Van Heusen, which also owns Calvin Klein, Arrow and Izod will create one of the world's largest apparel companies; a global business with combined revenue of some $4.6 billion.
Upon the closing of the transaction, Tommy Hilfiger will remain in his role as principal designer and public face of the Tommy Hilfiger brand. Fred Gehring will continue as CEO of the company, and will assume the added responsibility as CEO of Phillips-Van Heusen’s international operations, and will join the company’s board of directors.