1. Market Data
February 19, 2014

Signet Jewelers signs deal to takeover North American retailer Zale

Specialty retail jeweller Signet Jewelers has signed a deal with Zale, a North American retailer of fine jewellery, to acquire the latter in a $1.4bn deal.

By Rohit

Specialty retail jeweller Signet Jewelers has signed a deal with Zale, a North America retailer of fine jewellery, to acquire the latter in a $1.4bn deal.

As per the agreed terms, Signet will pay $21 per share in cash for all of the issued and outstanding stock of Zale.

Signet stated that the acquisition is in line with its long-term growth strategy and leverages its combined operating expertise to create better choices for customers, new opportunities for employees, and makes it a more attractive partner to its vendors.

It allows Signet to strengthen its omni-channel presence with jewellery store brands, including Kay Jewelers, Jared The Galleria Of Jewelry, H.Samuel, Ernest Jones, Zales, and Peoples.

In addition, the deal allows the company to better optimise its balance sheet, and create long-term value for its shareholders.

Signet Jewelers CEO Mike Barnes said that this transformational acquisition further diversifies the company’s businesses and extends its international footprint, opening the door to greater growth and innovation across the enterprise.

"We are excited about the prospects for the combined company and the many opportunities that this creates for our future."

The company plans to back the transaction through bank debt, other debt financing, and the securitisation of a significant portion of its accounts receivable portfolio.

The transaction is subject to the receipt of certain regulatory approvals and customary closing conditions.

Following the completion of the deal, Zale will continue to be led by current CEO Theo Killion under supervision of Barnes.

JP Morgan Securities provided financial advisory services to Signet, while BofA Merrill Lynch was exclusive financial advisor to Zale for the transaction.

US-headquartered Zale operates approximately 1,680 retail locations throughout the United States, Canada and Puerto Rico under the Zales Jewelers, Zales Outlet, Gordon’s Jewelers, Peoples Jewellers, Mappins Jewellers, and Piercing Pagoda names.