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Michael Kors gets commitment for up to $2.6 billion to acquire Versace
By Wendy Van Sickle
Columbus, Ohio, Sept. 26 – Michael Kors Holdings Ltd. entered into a commitment letter on Monday with lenders JPMorgan Chase Bank, NA and Barclays Bank plc committing to arrange and provide up to $2.6 billion, according to an 8-K filing with the Securities and Exchange Commission
The total commitment amount includes a $1.6 billion unsecured term loan facility and, if some amendments are not obtained under the company’s existing credit facilities before its closing of its acquisition of Gianni Versace S.p.A., a $1 billion backstop revolving credit facility.
The proceeds of the term loan facility will be used at closing to finance the acquisition, to fund the refinancing of Versace’s existing debt and credit facilities and to pay the fees, costs and expenses incurred in connection with the acquisition, the refinancing and the facilities.
If the backstop revolver is required, its proceeds will be used at closing of the acquisition for purposes related to the acquisition and to refinance Michael Kors’ existing credit facilities and thereafter for the company’s general corporate purposes.
Availability of borrowings under the facilities is subject to the satisfaction of some customary conditions, including consummation of the acquisition.
Michael Kors announced on Tuesday that a definitive agreement had been signed to acquire all the outstanding shares of the Italian luxury fashion house for a total enterprise value of about $2.12 billion. After the acquisition, Michael Kors is to be renamed Capri Holdings Ltd.
Michael Kors is a global fashion luxury group based in London.
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