PARAMUS, N.J.--(BUSINESS WIRE)--Oct. 1, 2018--
Movado Group, Inc. (NYSE:MOV) (the “Company”) today announced that it
has completed its previously announced acquisition of MVMT Watches Inc.,
the owner of MVMT (“MVMT”), a global aspirational lifestyle brand. The
purchase price was comprised of an initial payment of approximately $100
million, or approximately $85 million net of tax benefits that are
anticipated to be generated from the acquisition, subject to working
capital and other closing adjustments, and two future contingent
payments that combined could total up to an additional $100 million
before tax benefits. The exact amount of the future payments will be
determined by MVMT’s future financial performance with no minimum
required future payment. The acquisition was funded through cash on
hand, although the Company anticipates replenishing a portion of its
cash through approximately $50 million of borrowings under its revolving
credit facility by October 31, 2018.
As previously announced, the benefits of the transaction include:
-
Adds a category-leading millennial brand created though world-class
digital execution that has a strong track record of growth,
category-leading site traffic and growing customer relationships that
will position Movado Group to accelerate its digital strategy.
-
Provides a significant global growth opportunity for Movado Group’s
portfolio as MVMT continues to cross-sell products within its existing
portfolio, expand product offerings within its core categories of
watches, sunglasses and accessories, and grow its presence in new
markets through its direct-to-consumer and wholesale business.
-
Allows MVMT to benefit from Movado Group’s global infrastructure and
distribution network to help accelerate MVMT’s expansion in untapped
categories, channels and geographies.
-
Increases Movado Group’s exposure to both aspirational and millennial
consumers through MVMT’s differentiated and affordable watches,
sunglasses and accessories.
-
Strengthens Movado Group’s digital and direct-to-consumer capabilities.
In its last fiscal year ended December 31, 2017, MVMT achieved revenue
of approximately $71 million. Movado Group expects the transaction to be
accretive to its results for the fiscal year ending January 31, 2019,
exclusive of transaction-related charges and the amortization of
anticipated purchase accounting adjustments.
Efraim Grinberg, Movado Group’s Chairman and Chief Executive Officer,
stated, “We are pleased to officially welcome MVMT to Movado Group
having closed on this strategic acquisition. MVMT provides many benefits
to our Company – we add a strong digital brand to our portfolio; broaden
our customer reach to millennials, an important consumer segment; and
increase the sales and earnings potential of our Company with an
acquisition that we expect will be accretive to fiscal 2019 results. We
expect to leverage the strengths of MVMT combined with our scale and
operating platform to take the brand to a greater level of growth. With
the closing of this acquisition, we are well positioned to capitalize on
the full potential of our owned and licensed brands portfolio as we
focus on delivering sustainable long-term growth.”
Jake Kassan, Co-founder and Chief Executive Officer of MVMT, stated, “I
am excited to officially be part of the Movado team. The entire MVMT
team shares in my excitement as we will now be able to benefit from the
resources and brand expertise of Movado Group that will help MVMT
achieve our long-term objectives.”
Kramer LaPlante, Co-founder and Chief Operating Officer of MVMT, added,
“I, along with the 39 associates at MVMT, share in the enthusiasm to be
part of Movado Group. We expect Movado Group’s scale, relationships and
expertise in the timepiece category to accelerate the growth and
development of our business as we maximize both businesses’ focus on
product innovation, unique design and value for the consumer.”
Movado Group, Inc. designs, sources, and distributes MOVADO®, MVMT®,
OLIVIA BURTON®, EBEL®, CONCORD®, COACH®, TOMMY HILFIGER®, HUGO BOSS®,
LACOSTE®, SCUDERIA FERRARI®, REBECCA MINKOFF® and URI MINKOFF® watches
worldwide, and operates Movado company stores in the United States and
Canada.
Safe Harbor
This press release contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. The
Company has tried, whenever possible, to identify these forward-looking
statements using words such as “expects,” “anticipates,” “believes,”
“targets,” “goals,” “projects,” “intends,” “plans,” “seeks,”
“estimates,” “may,” “will,” “should” and variations of such words and
similar expressions. Similarly, statements in this press release that
describe the Company's business strategy, outlook, objectives, plans,
intentions or goals are also forward-looking statements. Accordingly,
such forward-looking statements involve known and unknown risks,
uncertainties and other factors that could cause the Company's actual
results, performance or achievements and levels of future dividends to
differ materially from those expressed in, or implied by, these
statements. These risks and uncertainties may include, but are not
limited to, general economic and business conditions which may impact
disposable income of consumers in the United States and the other
significant markets (including Europe) where the Company’s products are
sold, uncertainty regarding such economic and business conditions,
trends in consumer debt levels and bad debt write-offs, general
uncertainty related to possible terrorist attacks, natural disasters,
the stability of the European Union (including the impact of the June
23, 2016 referendum advising that the United Kingdom exit from the
European Union) and defaults on or downgrades of sovereign debt and the
impact of any of those events on consumer spending, changes in consumer
preferences and popularity of particular designs, new product
development and introduction, the ability of the Company to successfully
implement its business strategies, competitive products and pricing, the
impact of “smart” watches and other wearable tech products on the
traditional watch market, seasonality, availability of alternative
sources of supply in the case of the loss of any significant supplier or
any supplier’s inability to fulfill the Company’s orders, the loss of or
curtailed sales to significant customers, the Company’s dependence on
key employees and officers, the ability to successfully integrate the
operations of acquired businesses without disruption to other business
activities, the continuation of the company’s major warehouse and
distribution centers, the continuation of licensing arrangements with
third parties, losses possible from pending or future litigation, the
ability to secure and protect trademarks, patents and other intellectual
property rights, the ability to lease new stores on suitable terms in
desired markets and to complete construction on a timely basis, the
ability of the Company to successfully manage its expenses on a
continuing basis, information systems failure or breaches of network
security, the continued availability to the Company of financing and
credit on favorable terms, business disruptions, disease, general risks
associated with doing business outside the United States including,
without limitation, import duties, tariffs, quotas, political and
economic stability, changes to existing laws or regulations, and success
of hedging strategies with respect to currency exchange rate
fluctuations, and the other factors discussed in the Company’s Annual
Report on Form 10-K and other filings with the Securities and Exchange
Commission. These statements reflect the Company's current beliefs and
are based upon information currently available to it. Be advised that
developments subsequent to this press release are likely to cause these
statements to become outdated with the passage of time. The Company
assumes no duty to update its forward looking statements and this
release shall not be construed to indicate the assumption by the Company
of any duty to update its outlook in the future.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181001006003/en/
Source: Movado Group, Inc.
ICR, Inc.
Investors:
Rachel Schacter / Allison Malkin
203-682-8200
or
Media:
Alecia
Pulman / Brittany Fraser
Alecia.Pulman@icrinc.com
/ Brittany.Fraser@icrinc.com
203-682-8200