Signet Jewelers Acquiring Zale Corp For $1.4 Billion

(IDEX Online News) – Signet Jewelers Ltd, the largest specialty retail jeweler in the US and the UK, is to acquire Zale Corporation, a leading specialty retailer of fine jewelry in North America for $1.4 billion.

The firms announced a definitive agreement for Signet to acquire all of the issued and outstanding stock of Zale for $21.00 per share in cash. The price represents a premium of 41 percent over Zale's closing price as of February 18.

"This transformational acquisition further diversifies our businesses and extends our international footprint, opening the door to greater growth and innovation across the enterprise," stated Mike Barnes, Signet's Chief Executive Officer. "The addition of Zale to the Signet family is consistent with our long-term growth strategy and leverages our combined operating expertise to create better choices for our customers, new opportunities for our employees, and makes us a more attractive partner to our vendors.

“In addition, it allows us to better optimize our balance sheet, creating long-term value for our shareholders. We are excited about the prospects for the combined company and the many opportunities that this creates for our future. I am happy to say it is our intention that Zale will continue to run under current leader CEO, Theo Killion, who would report directly to me after the transaction closes.”

"Having successfully completed our multi-year turnaround program to return to profitability, Signet's operating strengths will enable us to accelerate Zale's performance improvement for the benefit of our current and future guests," commented Killion.

The transaction is expected to be high single-digit percentage accretive to earnings in the first full fiscal year after the close of the transaction, excluding acquisition accounting adjustments and one-time transaction costs.

The acquisition is expected to be financed through bank debt, other debt financing and the securitization of a significant portion of Signet's accounts receivable portfolio.

The transaction is subject to Zale stockholder approval, certain regulatory approvals and customary closing conditions.

Signet Jewelers is the largest specialty jewelry retailer in the US and UK. Signet's US division operates over 1,400 stores in all 50 states primarily under the name brands of Kay Jewelers and Jared The Galleria Of Jewelry. Signet's UK division operates approximately 500 stores primarily under the name brands of H.Samuel and Ernest Jones.