In September 2018, Capri Holdings Limited announced that it had acquired the Italian fashion house Versace for a staggering $2.12 billion. The deal was finalized on December 31, 2018, making Versace one of the many luxury brands that now fall under the umbrella of Capri Holdings.
Background
Capri Holdings is a fashion holding company that was formerly known as Michael Kors Holdings Limited. It was founded in 1981 by its namesake designer Michael Kors and has since then expanded to include other brands such as Jimmy Choo and now Versace.
Versace, on the other hand, was founded in 1978 by Gianni Versace. The brand is known for its bold and colorful designs and has been worn by numerous celebrities over the years including Jennifer Lopez, Lady Gaga, and Madonna.
The Acquisition
The acquisition of Versace by Capri Holdings was a significant move for both companies. For Capri Holdings, it meant expanding their portfolio of luxury brands and gaining access to Versace’s loyal customer base. For Versace, it meant having the financial backing of a larger company to help with growth and expansion plans.
The Price
The price tag for the acquisition was announced at $2. This included $177 million in debt that Capri Holdings took on as part of the deal. The purchase price was broken down into three parts: $1.83 billion in cash, $140 million in Capri Holdings shares, and $250 million in notes.
The Impact
The acquisition of Versace had an immediate impact on both companies. For Capri Holdings, it resulted in a slight dip in their stock price as investors were unsure if they had paid too much for the brand. However, as time has passed since the acquisition, it seems that investors are now more optimistic about the future potential of the brand.
For Versace, the acquisition has meant increased exposure and access to a larger customer base. The brand has also been able to expand into new markets such as China, where Capri Holdings already has a strong presence.
Conclusion
In conclusion, the acquisition of Versace by Capri Holdings was a significant move for both companies. It allowed Capri Holdings to expand their portfolio of luxury brands and gain access to Versace’s loyal customer base.
For Versace, it meant having the financial backing of a larger company to help with growth and expansion plans. While there was some initial uncertainty surrounding the acquisition, it seems that both companies are now poised for success in the future.