Coach Inc. To Acquire Kate Spade & Co. In $2.4 Bln Deal - Quick Facts

(RTTNews) - Coach Inc. (COH) said that it agreed to acquire Kate Spade & Company (KATE) for $18.50 per share in cash, valuing the company at $2.4 billion.

The transaction represents a 27.5% percent premium to the unaffected closing price of Kate Spade's shares as of December 27, 2016, the last trading day prior to media speculation of a transaction.

The transaction has been unanimously approved by the Boards of Directors of Kate Spade & Company and Coach, Inc.

Coach expects that the acquisition will be accretive in fiscal 2018 on a non-GAAP basis, and will reach double-digit accretion by fiscal 2019, also on a non-GAAP basis.

The transaction is not subject to a financing condition. Coach has secured committed bridge financing from BofA Merrill Lynch. The $2.4 billion purchase price is expected to be funded by a combination of senior notes, bank term loans and approximately $1.2 billion of excess Coach cash, a portion of which will be used to repay an expected $800 million 6-month term loan.

The transaction is expected to close in the third quarter of calendar 2017, subject to customary closing conditions, including the tender of a majority of the outstanding Kate Spade & Company shares pursuant to the offer and receipt of required regulatory approvals.