PVH Corp. completed the acquisition of the approximately 78 percent of the outstanding shares of Gazal Corporation Limited, PVH’s long-term partner in Australia, not previously owned.
The transaction is expected to result in a material increase to PVH’s 2019 earnings per share on a GAAP basis, as PVH expects to record a noncash gain to write-up to fair value its equity investments in Gazal and PVH Brands Australia Pty Limited (a joint venture between PVH and Gazal). The transaction is expected to be slightly accretive to PVH’s 2019 earnings on a non-GAAP basis, which excludes the noncash gain.
Four key members of management of Gazal and the joint venture have entered into employment agreements and are expected to remain in their roles for at least two years. These executives exchanged approximately 25 percent of their interests in Gazal for approximately 6 percent of the outstanding stock of the PVH subsidiary that is the parent company of the acquirer.
“Our decision to acquire Gazal is aligned with PVH’s strategic priority to expand our worldwide reach by assuming more direct control over our brands’ regional licensed businesses. By joining forces now, we believe we’re well positioned to capture the significant growth in the Australia and New Zealand markets,” said Emanuel Chirico, PVH Corp. chairman and CEO. “We are pleased to welcome Gazal into our PVH family and continue driving our business forward together.”
PVH’s brands included Calvin Klein, Tommy Hilfiger, Van Heusen, Izod, Arrow, Speedo, Warner’s, Olga and Geoffrey Beene, as well as the digital-centric True & Co. intimates brand. The Speedo brand is licensed for North America and the Caribbean in perpetuity from Speedo International Limited.