CVC Capital takes over Samsonite for $1.7 billion

06 July 2007

In a $1.7-billion (Rs68,731 crore) all-cash deal that includes debt, luxury luggage brand Samsonite, one of the world''s largest luggage brands, has agreed to be bought by the London-based private equity firm CVC Capital.

The transaction represents $1.49 a share, a 12-per cent premium to Samsonite''s closing share price on Tuesday and CVC is paying more than 16 times trailing Ebitda.

Samsonite manufactures and distributes luggage and travel-related products under its own brands Samsonite Black Label, Lambertson Truex, American Tourister and others such as American Tourister, Lacoste and Timberland.

Marcello Bottoli, Samsonite chief executive, said the deal was "excellent value" for shareholders. "I am excited to continue our successful journey to create the world''s leading travel lifestyle brand together with CVC Capital Partners."

Samsonite said entities controlled by Ares Management LLC, Bain Capital Partners LLC and Teachers'' Private Capital, the private investment arm of Ontario Teachers'' Pension Plan, own about 85 per cent of Samsonite''s common stock, have agreed to approve the transaction.

The sellers group had bailed out Samsonite in 2003 after the company faced a weakened balance sheet in 2003 and announced a recapitalisation. They originally invested a total of roughly $106 million into the company in July 2003, each putting forth about $35 million for a 56-per cent stake through convertible preferred shares. Over time, they boosted their stake to 85 per cent with fresh infusions.