Aber Takes Full Ownership of Harry Winston for $157 Million

Aber Diamond Corporation announced today (Tuesday) an agreement to purchase the minority shareholders' interest in jeweler Harry Winston, for approximately $157 million. The purchase will give Aber full ownership of the high end jeweler.

Aber purchased a 51 percent stake in Harry Winston in April 2004 for $85 million and has since increased its equity interest to approximately 53 percent. The original purchase agreement included an option allowing Aber to purchase the balance of Harry Winston in 2010.

The transaction values Harry Winston, on an equity basis, at approximately $330 million. Aber will finance the acquisition through a combination of cash resources and an increase to Aber's existing credit facility without affecting the existing dividend policy.

The acquisition and the expanded credit facility are expected to close by the end of September 2006.

“The past two and half years have demonstrated the tangible benefits of linking the marketing of rough diamonds to a high-end diamond retailer in the form of improved margins at both ends of the business," said Robert Gannicott, chairman and CEO of Aber.

Since the initial investment, Harry Winston sales have grown from approximately $128 million for the full twelve months of fiscal year 2004, to $191 million for fiscal year 2006. In addition, better margins and operational performance, contributed to Aber's net earnings earlier than planned.

“The market for luxury goods, including diamond jewelry, is one of the fastest growing segments of the consumer market," said Thomas O'Neill, Aber's president and CEO of Harry Winston. "We believe that given the recognition of the brand relative to the size of the store network, there is an opportunity for significant growth."

Founded in 1932, Harry Winston is one of the world's most prestigious branded diamond jewelers. It owns the Hope Diamond, now on permanent display at the Harry Winston Pavilion at the Smithsonian Institution.

Aber is a diamond company focusing on the mining and retail segments of the diamond industry. The company holds a 40 percent ownership in the Diavik diamond mine in Canada.