Zale (ZLC +40%) and Signet Jewelers (SIG +10%) merger news may lift jewelry retail names (NILE, KGJI, MOV, SWGAY, TIF, FOSL on radar)
Details :
Zale and Signet Jewelers (SIG) confirm agreement for Signet to acquire all of the issued and outstanding stock of Zale for $21.00 per share in cash consideration
- Signet Jewelers (SIG) and Zale announced that they have entered into a definitive agreement for Signet to acquire all of the issued and outstanding stock of Zale for $21.00 per share in cash consideration.
- The acquisition strengthens Signet's omni-channel presence with some of the most recognizable jewelry store brands in the world, each operating as stand-alone brands including: Kay Jewelers, Jared The Galleria Of Jewelry, H.Samuel, Ernest Jones, Zales, and Peoples.
- Signet's offer represents a premium of 41% over Zale's closing price as of Feb 18, 2014. The transaction would be valued at ~ $1.4 bln, representing an enterprise value to last twelve months Oct-13 Adjusted EBITDA multiple of 7.4x. As part of the transaction, Signet has entered into a voting and support agreement with Golden Gate Capital, the beneficial owner of ~ 22% of Zale's common stock. The transaction is expected to be high single-digit percentage accretive to earnings in the first full fiscal year after the close of the transaction, excluding acquisition accounting adjustments and one-time transaction costs.
- 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.