- Highlights Continued Progress Towards Closing the Previously
Announced Acquisition of Capri Holdings Limited
- Completed Acquisition Financing with $7.5 Billion of Senior
Unsecured Notes and Delayed Draw Term Loans
- Achieved All-In Debt Interest Rate of 6.5% for Senior Notes,
Term Loans, and Existing Tapestry Debt, Consistent with
Expectations
- Financing Strategy Positioned to Enable Rapid Debt Paydown,
Underscoring the Company’s Confidence in Achieving its Stated
Leverage Target and Commitment to a Solid Investment Grade
Rating
Tapestry, Inc. (NYSE: TPR) (the “Company”), a house of iconic
accessories and lifestyle brands consisting of Coach, Kate Spade,
and Stuart Weitzman, announced the closing of its $4.5 billion USD
senior unsecured notes and its €1.5 billion Euro-denominated senior
unsecured notes offerings. Together with Tapestry’s existing $1.4
billion of delayed draw term loans, excess cash, and anticipated
future cash flow, the Company has fully funded its planned $7.5
billion in debt financing and is well-positioned to close the
previously announced acquisition of Capri Holdings Limited, once
closing conditions have been satisfied.
Tapestry, Inc.’s Chief Financial Officer and Chief Operating
Officer, Scott Roe, said, “We are pleased to announce the
completion of our financing transaction, highlighting Tapestry’s
progress towards closing the previously announced acquisition of
Capri Holdings Limited. To this end, we raised $6.1 billion in
senior notes, garnering high-quality fixed income investors
globally, and securing an all-in debt interest rate, including
Tapestry's existing debt, of 6.5%, in-line with our original
expectations. Importantly, our financing strategy supports rapid
debt paydown, consistent with our commitment to maintaining a solid
investment grade rating.”
“Looking forward, we remain excited by the opportunity to expand
our house of powerful brands, driving enhanced earnings power and
free cash flow generation. This combination is transformational and
we are confident in our ability to execute, positioning Tapestry as
a leader in innovation, talent development, and shareholder returns
for years to come.”
Financing Highlights
The Company secured permanent financing in both the USD and EUR
markets, underscoring Tapestry’s continued progress towards closing
the pending acquisition of Capri Holdings Limited:
- Secured $6.1 billion in notes financing, consisting of a
combination of US Dollar and Euro-denominated senior unsecured
notes;
- Garnered high-quality interest, resulting in offerings that
were significantly oversubscribed across both the USD and EUR
tranches with an orderbook that included hundreds of global fixed
income investors;
- Achieved all-in debt interest rate of 6.5%, including
Tapestry’s existing debt, consistent with the Company’s original
expectations, and continuing to support double-digit EPS accretion
on an adjusted basis and consistent cash flow generation;
- Terminated the Company’s $6.6 billion bridge facility with the
proceeds of the senior notes issuance and cash on hand;
- Advanced the Company’s financing strategy that supports rapid
debt paydown, including prepayable term loan debt, in order to
achieve its stated target of a gross leverage ratio below 2.5x
Debt/ adjusted EBITDA within 24 months post-close given the
combined entity’s strong cash flow generation.
Summary of Offering and Tapestry, Inc.
Debt Outstanding
USD Offering
Description
Amount
Rate
Maturity
2025 USD Notes
$500,000,000
7.050%
November 27, 2025
2026 USD Notes
$750,000,000
7.000%
November 27, 2026
2028 USD Notes
$1,000,000,000
7.350%
November 27, 2028
2030 USD Notes
$1,000,000,000
7.700%
November 27, 2030
2033 USD Notes
$1,250,000,000
7.850%
November 27, 2033
EUR Offering
Description
Amount
Rate
Maturity
2025 EUR Notes
€500,000,000
5.350%
November 27, 2025
2027 EUR Notes
€500,000,000
5.375%
November 27, 2027
2031 EUR Notes
€500,000,000
5.875%
November 27, 2031
Delay Draw Term Loans
Description
Amount
Rate
Maturity
3-Yr Term Loan
$1,050,000,000
SOFR+CSA+125.0 bps
3 years post funding
5-Yr Term Loan
$350,000,000
SOFR+CSA+137.5 bps
5 years post funding
Lead Book Running
Managers
BofA Securities, Morgan Stanley and J.P. Morgan acted as joint
lead book-running managers for the senior unsecured notes
offerings.
About Tapestry, Inc.
Our global house of brands unites the magic of Coach, kate spade
new york and Stuart Weitzman. Each of our brands are unique and
independent, while sharing a commitment to innovation and
authenticity defined by distinctive products and differentiated
customer experiences across channels and geographies. We use our
collective strengths to move our customers and empower our
communities, to make the fashion industry more sustainable, and to
build a company that’s equitable, inclusive, and diverse.
Individually, our brands are iconic. Together, we can stretch
what’s possible. The Company’s common stock is traded on the New
York Stock Exchange under the symbol TPR.
This press release may contain certain “forward-looking
statements” within the meaning of the federal securities laws,
including Section 27A of the Securities Act and Section 21E of the
Exchange Act, and are based on management’s current expectations,
that involve risks and uncertainties that could cause our actual
results to differ materially from our current expectations. In this
context, forward-looking statements often address expected future
business and financial performance and financial condition, and
often contain words such as “may,” “can,” “continue,” “project,”
“should,” “expect,” “confidence,” “goals,” “trends,” “anticipate,”
“intend,” “estimate,” “on track,” “future,” “well positioned to,”
“plan,” “potential,” “position,” “believe,” “seek,” “see,” “will,”
“would,” “target,” “support,” similar expressions, and variations
or negatives of these words. Forward-looking statements by their
nature address matters that are, to different degrees, uncertain.
Such statements involve risks, uncertainties and assumptions. If
such risks or uncertainties materialize or such assumptions prove
incorrect, our results could differ materially from those expressed
or implied by such forward-looking statements and assumptions. All
statements other than statements of historical fact are statements
that could be deemed forward-looking statements. We assume no
obligation to revise or update any such forward-looking statements
for any reason, except as required by law. Our actual results could
differ materially from the results contemplated by these
forward-looking statements and are subject to a number of risks,
uncertainties, estimates and assumptions that may cause actual
results to differ materially from current expectations due to a
number of factors, including, but not limited to: the impact of
economic conditions, recession and inflationary measures; the
impact of the coronavirus pandemic; our exposure to international
risks, including currency fluctuations and changes in economic or
political conditions in the markets where we sell or source our
products; our ability to retain the value of our brands and to
respond to changing fashion and retail trends in a timely manner,
including our ability to execute on our e-commerce and digital
strategies; our ability to successfully implement the initiatives
under our 2025 growth strategy; the effect of existing and new
competition in the marketplace; our ability to control costs; the
effect of seasonal and quarterly fluctuations on our sales or
operating results; the risk of cyber security threats and privacy
or data security breaches; our ability to protect against
infringement of our trademarks and other proprietary rights; the
impact of tax and other legislation; the risks associated with
potential changes to international trade agreements and the
imposition of additional duties on importing our products; our
ability to achieve intended benefits, cost savings and synergies
from acquisitions, including our proposed acquisition of Capri
Holdings Limited; the impact of pending and potential future legal
proceedings; and the risks associated with climate change and other
corporate responsibility issues.
These factors are not necessarily all of the factors that could
cause actual results to differ materially from those expressed in
any of our forward-looking statements. A detailed discussion of
significant risk factors that have the potential to cause our
actual results to differ materially from our expectations is
described in “Risk Factors” on in Part I, Item 1A of the 2023 Form
10-K, which we have filed with the SEC and is incorporated by
reference herein, and in future filings with the SEC. We undertake
no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events,
or otherwise, except as required by law.
Adjusted EBITDA referenced above is calculated as Net Income,
excluding, Interest expense, Provision for income taxes,
Depreciation and amortization, Cloud computing amortization costs,
Shared-based compensation and Items affecting comparability
including Acquisition and Integration costs.
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version on businesswire.com: https://www.businesswire.com/news/home/20231127175747/en/
Tapestry, Inc. Media: Andrea Shaw Resnick Chief Communications
Officer 212/629-2618 aresnick@tapestry.com Analysts and Investors:
Christina Colone Global Head of Investor Relations 212/946-7252
ccolone@tapestry.com Kelsey Mueller 212/946-8183 Director of
Investor Relations kmueller@tapestry.com
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