US clothing company PVH has signed definitive agreement to purchase the remaining interests in Australian apparel supplier and retailer Gazal for around A$124m ($88.05m).
Based in Sydney, the Australian firm jointly owns and manages PVH Brands Australia, which was established through a joint venture (JV) with PVH in 2014.
The scheme implementation agreement was signed by Gazal with Sunshine B (PVH Bidco), an indirect wholly owned subsidiary of PVH.
Provided it goes through, the transaction will allow PVH to take control of the Australian JV by acquiring approximately 78% of Gazal shares for A$6 ($4.26) per share.
In addition, the agreement also covers the divestiture of Gazal-owned office building and warehouse in Banksmeadow, New South Wales, to a third-party following completion of the transaction.
PVH Brands Australia licences and operates lifestyle apparel brands of PVH, including Calvin Klein and Tommy Hilfiger, Van Heusen, Pierre Cardin, Bracks and Nancy Ganz in Australia, New Zealand and other parts of Oceania.
PVH chairman and CEO Emanuel Chirico said: “PVH currently, and for many years, has had a successful business relationship with our Australian partners and would be pleased to bring them into the larger PVH family.
“Gazal has enhanced the market position of our brands in Australia and New Zealand and we believe the region continues to offer significant growth over the next five years and aligns with our strategic priority to expand our direct control of businesses operated under the Calvin Klein and Tommy Hilfiger brands worldwide.”
The acquisition is currently subject to customary conditions including shareholder, court and regulatory approvals, and will be completed in the second quarter of this year.
In addition, the agreement will have to continue the key management of Gazal and the JV in their roles for at least two years as part of the agreement.
It also allows them to use approximately 25% of existing Gazal equity to subscribe for a 6% stake in the PVH subsidiary.