Signet Jewelers To Acquire Zale Corp.

Feb 19 2014, 12:29pm CST | by

Signet Jewelers, the largest specialty retail jeweler in the US and the UK, and Zale Corp., a leading fine jewelry retailer in North America, said Wednesday that they have entered into a definitive agreement for Signet to acquire all of the stock of Zale for $21 per share in cash.

The deal is estimated to have an enterprise value of $1.4 billion (which includes stock price and debt) and is 41% over Zale’s closing price on February 18, according to a joint statement issued Wednesday morning.

As part of the transaction, Signet has entered into a voting and support agreement with Golden Gate Capital, which owns approximately 22% of Zale’s common stock.

The transaction brings together two companies with six of the most recognizable brands across four countries. The combined company will have approximately 3,600 retail locations in the US, Canada, Puerto Rico and the UK with combined sales of $6.2 billion “and enhanced operating capabilities expected to generate approximately $100 million in annual synergies within three fiscal years,” according to the statement.

Mike Barnes, Signet CEO, will hold the same position in the combined company. Theo Killion, Zale CEO, will continue to operate Zale as a separate division and report to Barnes.

Signet has 1,400 retail locations that operate under the brands Kay Jewelers, Jared The Galleria Of Jewelry and regional brands. Signet’s UK division operates approximately 500 stores primarily under the brands of H.Samuel and Ernest Jones.

Zale Corp. has 1,680 retail locations in the US, Canada and Puerto Rico. Its brands include Zales Jewelers, Zales Outlet, Gordon’s Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda.

“This transformational acquisition further diversifies our businesses and extends our international footprint, opening the door to greater growth and innovation across the enterprise,” Barnes said. “The addition of Zale to the Signet family is consistent with our long-term growth strategy and leverages our combined operating expertise to create better choices for our customers, new opportunities for our employees, and makes us a more attractive partner to our vendors. In addition, it allows us to better optimize our balance sheet, creating long-term value for our shareholders.”

Killion added, “Having successfully completed our multi-year turnaround program to return to profitability, Signet’s operating strengths will enable us to accelerate Zale’s performance improvement for the benefit of our current and future guests.”

The acquisition is expected to be financed through bank debt, other debt financing and the securitization of a significant portion of Signet’s accounts receivable portfolio.

The transaction is subject to Zale stockholder approval, certain regulatory approvals and customary closing conditions.

Source: Forbes Business

 
 
 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

18 Amazon Dash Buttons Released
18 Amazon Dash Buttons Released
The unique Amazon Dash Buttons are on sale now for Prime Members.
 
 
Yahoo Releases Livetext Video Texting App
Yahoo Releases Livetext Video Texting App
The app shares videos, pictures and texts with friends without sound and can rival Whatsapp and Snapchat.
 
 
United Airlines Also Hacked by OPM Hackers
United Airlines Also Hacked by OPM Hackers
The hackers previously breached the U.S. Office of Personnel Management and collected massive data.
 
 
Windows 10 Ads Excessively Show Babies
Windows 10 Ads Excessively Show Babies
Microsoft released a series of Windows 10 commercials with lots of babies.