Samsonite to Acquire Tumi for US$ 1.8 Billion

Samsonite has entered into a definitive agreement to acquire Tumi for US$26.75 per share in an all cash transaction, valuing Tumi at an equity value of US$1.8 billion.

Founded in 1975, Tumi is a global brand offering a comprehensive line of business bags, travel luggage and accessories. Its products range from the iconic black ballistic business cases and travel luggage synonymous with the modern business professional, to travel accessories, women's bags and outdoor apparel.

For the year ended 31 December 2015, Tumi's net sales were US$548 million, representing a year-on-year increase of 4%. North America accounted for 68% of Tumi's 2015 net sales, with Asia Pacific accounting for 17%, Europe, the Middle East and Africa accounting for 14% and Latin America accounting for the remaining 1%.

Tumi has historically achieved strong growth in net sales, with a CAGR of 17% from 2010 to 2015 and highly attractive EBITDA margins of over 20% during the same period.

Tumi Chief Executive Officer Jerome Griffith said, "This is an exciting day for Tumi and all the travelers around the world who count on us. The team at Samsonite has a long and successful track record when it comes to acquisitions and we know they will be excellent stewards of the Tumi brand. Samsonite will bring Tumi to new and growing markets, while still maintaining the high quality Tumi is known for. This is a compelling transaction that delivers substantial and immediate cash value to our shareholders. Further, we are excited for our employees to benefit from opportunities presented by being part of a larger and more diversified global company. Samsonite has successfully grown many unique brands and we look forward to the next chapter in Tumi's great history as part of the Samsonite family."

Under the terms of the transaction, Tumi shareholders will receive US$26.75 in cash for each share they own. The transaction values Tumi at an equity valuation of approximately US$1.8 billion. This represents a 13.6x multiple of enterprise value to Tumi's Adjusted EBITDA for the last twelve months ended 31 December 2015 and a premium of approximately 38% to Tumi's volume weighted average price of US$19.34 for the five days up to and including 2 March 2016, the last trading day prior to market rumors.

Samsonite intends to fund the transaction through committed bank financing. In connection with the transaction, Morgan Stanley, HSBC, SunTrust and MUFJ have arranged the committed financing.

The transaction has been unanimously approved by the Boards of Directors of both companies and is expected to close in the second half of 2016, subject to the receipt of approvals by Samsonite and Tumi shareholders, the receipt of required regulatory approvals and the satisfaction of other customary closing conditions.

The combined company will continue to be listed on the Main Board of The Stock Exchange of Hong Kong Limited.

"This is a transformational acquisition for Samsonite. It will meaningfully expand our presence in the highly attractive premium segment of the global business bags, travel luggage and accessories market," said Ramesh Tainwala, Chief Executive Officer of Samsonite. "Tumi is a perfect strategic fit for our business. The brand is beloved by millions of loyal customers for its high quality and durable premium business and luggage products. We are excited about the tremendous opportunities this combination provides us to further diversify our product and customer portfolios. In particular, we will expand Tumi's presence in Asia and Europe, while strengthening its business in North America, by leveraging our expertise in global distribution, sourcing, product design and technical innovation, especially in the area of lightweight hardside luggage."

Morgan Stanley Asia Limited acted as financial advisor to Samsonite. Cleary Gottlieb Steen & Hamilton LLP, Ropes & Gray LLP and Freshfields Bruckhaus Deringer acted as legal counsel to Samsonite. Goldman, Sachs & Co. acted as financial advisor to Tumi in connection with the transaction, while Skadden, Arps, Slate, Meagher & Flom LLP acted as legal counsel.

See other recent news regarding: Samsonite, Tumi, Luggage, Baggage