Coach'S Acquisition Of Stuart Weitzman Has Been Basically Confirmed.

According to people familiar with the matter, the paction volume will be about $600 million. The official announcement is expected to be released early next Monday, but Coach is obviously eager to let the good news come to light. An official statement was issued a day later.

Coach said that Sycamore Weitzman, a private equity firm with Stuart Weitzman's controlling shareholder, has signed a formal takeover agreement with a total paction value of $574 million.

The initial payment will be 530 million dollars in cash, and if Stuart Weitzman can achieve the anticipated sales target in the next three years, Coach will add an additional $44 million.

Coach will use its own funds, or from the credit market.

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The acquisition is expected to be completed by May of this year, in accordance with the provisions of the Convention and the Hart-Scott-Rodino anti trust Improvement Act.

After excluding the impact of paction related costs (including acquisition related expected accounting adjustment and payment), the acquisition is expected to increase Coach earnings per share (EPS).

Stuart Weitzman has maintained a strong momentum over the past five years, with an annual compound average annual growth rate of 10%.

The expansion of sales channels, the rise of e-commerce and the growth of same store sales have promoted brand growth.

In fiscal year 2014 (September 30th 2014), Weitzman's sales net income amounted to US $300 million.

After the paction is completed, the brand founder and CEO, Stuart Weitzman, and the existing management team will continue to be responsible for brand operation.

Both sides have high expectations for the acquisition.

Coach's CEO, Victor Luis said in a statement, "Stuart Weitzman is a famous high-end lady in the United States.

In the past, it has maintained steady growth and has great potential in both local and international markets. "

Luis added that the strategic focus of Coach after the acquisition is still the pformation of its own brand Coach. The brand size of Weitzman and the retention of the existing management team will ensure that Coach successfully takes over Weitzman.

Stuart Weitzman, "I also return the prize," for us, Coach is a good strategic partner.

They respect our culture and are willing to provide us with resources and global business experience to help us develop all potential of the brand. "

However, the market did not seem to be very optimistic about the deal. After yesterday's news, Coach's share price has advanced, and it has closed down 36.30 US dollars, down 1.17% from the previous trading day, down 36% from a year ago.