South Korean retailer E.Land World announced yesterday it would buy all the outstanding common stock of US footwear maker K-Swiss for $4.75 a share in cash, or a total equity value of about $170 million.
K-Swiss was founded more than 40 years ago in Van Nuys, California, and is listed on Nasdaq. It is perhaps best known for having introduced the first all-leather tennis shoe, the K-Swiss Classic, in 1966.
E.Land is a privately owned retail group, established in 1980, that has grown to become one of the biggest South Korean conglomerates, primarily specialising in fashion and retail/distribution. It has been on an acquisition spree since 2009, adding outlets and upmarket brands. In 2011, E.Land bought the Italian brands Mandarina Duck and Coccinelle, the Palms Resort Saipan and the PIC resort in Saipan, and established a joint venture with Kate Spade in China.
Under the terms of the agreement, which was unanimously approved by K-Swiss’s board of directors, shareholders will receive $4.75 a share in cash, representing a 49% premium over K-Swiss’s closing price of $3.19 on Wednesday and a 62% premium over the three-month, volume-weighted average trading price.
The merger is expected to close during the second quarter of 2013.
E.Land World will use existing resources and credit facilities to fund the acquisition and will not need additional external financing for this transaction, according to the company.
“We are thrilled to be adding the K-Swiss and Palladium brands to E.Land Group’s portfolio,” said SungKyung Park, president of E.Land World. “K-Swiss is a well-established international sports brand and we are very excited about the tremendous potential both the K-Swiss and Palladium brands bring to our proven global platform,” said Park.
Goldman Sachs is the sole financial adviser to K-Swiss and Gibson, Dunn & Crutcher is acting as legal counsel to K-Swiss.
Morgan Stanley is the sole financial adviser to E.Land World and Linklaters is acting as legal counsel to E.Land World.