Sam­sonite to buy Tumi for $1.8 bil­lion

The Pak Banker - - COMPANIES/BOSS -

Sam­sonite In­ter­na­tional S.A. said on Fri­day it would buy Tumi Hold­ings Inc for $26.75 per share in an all-cash trans­ac­tion valu­ing Tumi at $1.8 bil­lion, as the world's big­gest lug­gage group ex­pands in the lux­ury mar­ket. Hong Kong-listed Sam­sonite said it would fi­nance the deal with bank loans and that the trans­ac­tion was ex­pected to close in the se­cond half of the year sub­ject to reg­u­la­tory and share­holder ap­provals.

In­vestors ap­plauded the deal, send­ing Sam­sonite shares up to as much as HK$25.2, their high­est since Oc­to­ber. The stock trimmed gains but was up 2.3 per­cent by mid­day, out­pac­ing a 0.6 per­cent gain in the bench­mark Hang Seng In­dex .HSI. "It is a per­fect match in many aspects such as retail chan­nels and re­gional mix, cat­e­gory mix and even price points," said Boy­oung Kim, an an­a­lyst at BNP Paribas.

"It can bring huge syn­er­gies in the long term," she added. The deal price rep­re­sents a 38 per­cent pre­mium to New Jersey-based Tumi's vol­ume weighted av­er­age price of $19.34 for the five days up to and in­clud­ing March 2, the state­ment said. Tumi's net sales in­creased 4 per­cent year-on-year in 2015 to $548 mil­lion, of which North Amer­ica ac­counted for 68 per­cent. Its net in­come rose 8.6 per­cent last year to $63 mil­lion. Sam­sonite Chief Ex­ec­u­tive Of­fi­cer Ramesh Tain­wala said the com­pany planned to ex­pand Tumi's pres­ence in Asia and Europe, while strength­en­ing its busi­ness in North Amer­ica. Mor­gan Stan­ley Asia Ltd acted as fi­nan­cial ad­vi­sor to Sam­sonite, and Gold­man Sachs & Co. acted as fi­nan­cial ad­vi­sor to Tumi. Apart from its flag­ship brand, Sam­sonite sells Li­pault travel bags, high-end Hartmann suit­cases, Amer­i­can Touris­ter lug­gage, and High Sierra and Gre­gory back­packs.

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