Shoemaker Skechers announced on Monday that it had agreed to be acquired by investment firm 3G Capital in a $9.4 billion deal that would take the company private after nearly three decades as a public entity. It’s the biggest-ever deal in the footwear industry and was unanimously approved by the Skechers board of directors.
The transaction will close in the third quarter of this year and be funded by a combination of cash from 3G Capital as well as debt financing from JPMorgan Chase Bank, per Bloomberg. 3G Capital has agreed to pay $63 per share, a 30% premium to Skechers’ average stock price.
After the deal closes, Skechers will no longer be listed on the New York Stock Exchange. The company will still be led by Founder, Chairman, and CEO Robert Greenberg and its current leadership team, including COO David Weinberg.
“With a proven track record, Skechers is entering its next chapter in partnership with the global investment firm 3G Capital,” Greenberg stated in a press release. “Given their remarkable history of facilitating the success of some of the most iconic global consumer businesses, we believe this partnership will support our talented team as they execute their expertise to meet the needs of our consumers and customers while enabling the Company’s long-term growth.”
Skechers founders Robert Greenberg (left) and son Michael Greenberg (right) in a Skechers display room. Photo by Carlos Chavez/Los Angeles Times via Getty Images
Skechers is one of many footwear companies that signed a letter to President Donald Trump last week asking for a reprieve from reciprocal tariffs, which are as high as 145% for imports from China and at a baseline of 10% for all countries.
Related: The Duty-Free Loophole on Cheap Goods From China Closes Friday. Here’s How It Will Affect Your Wallet.
“As leading U.S. footwear businesses, manufacturers, and retailers, we urge you to exempt footwear from the reciprocal tariffs,” the letter, which was signed by Nike, Adidas, Under Armour, and Puma, reads. It goes on to state that the tariffs could cause “substantial cost increases” and make footwear inventory run low in the U.S.
Skechers is the third-largest footwear company in the U.S. after Nike and Deckers, with a market capitalization of $9.25 billion at the time of writing. The shoemaker was founded in 1992 and went public in 1999 at an initial public offering price of $11 per share.
Skechers’ most recent earnings report, released last month, shows that sales reached a record-high $2.41 billion during the first quarter of the year ending March 31, up 7.1% year-over-year. Wholesale sales increased by 7.8% during the quarter.
The company stated in the report that the strong quarterly sales reflected “strong global demand.” International sales outside the U.S. contributed to 65% of Skechers’ business.
Related: Analysts Like The Fit Of Skechers USA
Meanwhile, 3G Capital has made a name for itself with its emphasis on cost-cutting and restructuring since it was founded in 2004. The firm focuses on zero-based budgeting, or on having executives begin at zero for their budget for every new quarter instead of starting with the expenses of the previous quarter.
3G Capital previously agreed to buy a majority stake in blinds and shutters maker Hunter Douglas NV for $7.1 billion in 2021. The firm also orchestrated the 2015 merger between Kraft Foods Group and The H.J. Heinz Company with the help of Warren Buffett’s Berkshire Hathaway.
Shares of Skechers were up over 24% at the time of writing.
Read the full article here
