Michael Kors buys luxury shoemaker Jimmy Choo for $1.59 billion

Michael Kors Holdings has agreed to buy luxury shoe brand Jimmy Choo for about £896 million (S$1.59 billion).
Michael Kors Holdings has agreed to buy luxury shoe brand Jimmy Choo for about £896 million (S$1.59 billion).PHOTO: REUTERS

PARIS (BLOOMBERG) - Michael Kors Holdings has agreed to buy Jimmy Choo PLC for about £896 million (S$1.59 billion), clinching the London-based maker of strappy stilettos, handbags and perfume.

The handbag maker will pay 230 pence a share to add the luxury shoemaker to its stable. The price is equal to about 17.5 times Jimmy Choo's adjusted Ebitda for 2016. Ebitda refers to earnings before interest, tax, depreciation and amortisation. 

The boards of both companies approved the deal, they said in a statement on Tuesday (July 25).

The Jimmy Choo brand first rose to prominence in the late 1990s and early 2000s, boosted by high-profile devotees including the late Princess Diana and the fictional Carrie Bradshaw in television series Sex And The City.

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The shoemaker was acquired by private-equity investors three times before being bought by JAB Holding for more than £500 million in 2011.

JAB, the investment vehicle of the billionaire Reimann family, sold a stake in a 2014 initial public offering, though with a 68 per cent holding has remained the company's majority owner.

 
 

In April this year, it was reported that JAB put shoemakers Jimmy Choo and Bally International up for sale.

It did so to focus on its growing food and coffee operations and to benefit from a rebound in sales of luxury footwear and accessories.