Samsonite will acquire Tumi for US$26.85 per share valuing Tumi at an equity value of US$1.8billion.
The acquisition will help Samsonite create a leading global travel lifestyle company and strategically expand into the highly attractive premium segment. It is a marriage of the North American purveyor of premium business bags, travel luggage and accessories with Samsonite, the world’s largest lifestyle bag and travel luggage company.
Tumi is an ideal and complementary fit with Samsonite. Tumi has around 2,000 points of distribution across 75 countries. Tumi also leads the market in the premium business and luggage segment.
The acquisition presents tremendous opportunities to leverage Samsonite’s extensive global retail and wholesale network and its strengths in distribution, sourcing, technical innovation and localisation of products to introduce the Tumi brand to millions of new customers in additional markets worldwide.
Tumi is a highly profitable business and the combined company is expected to generate significant free cash flow to meet interest payments while continuing to make cash distributions to shareholders.
The acquisition also creates potential for significant operational and top-line synergies including cost savings is key areas such as sourcing, logistics, marketing, distribution, retail and general and administrative costs.
Tumi was founded in 1975. The brand is recognised as ‘best-in-class” for its high quality, durability, functionality and innovative design.
For the year ended December 31, 2015, Tumi’s net sales were US$548 million, representing a year on year increase of 4%. North America accounted for 68% of Tumi’s 2015 net sales, with Asia Pacific accounting for 17%, Europe, Middle East and Africa accounting for 14% and Latin America accounting for the remaining 1%. Tumi has historically achieved strong growth in net sales, with a CAGR of 17% from 2010 to 2015 and highly attractive EBITDA margins of over 20% during the same period.
Tumi shareholders will receive US$26.75 in cash for each share they own. The transaction values Tumi at an equity valuation of approximately US$1.8 billion. This represents a 13.6x multiple of enterprise value to Tumi’s Adjusted EBITDA for the last twelve months ended December 31, 2015 and a premium of approximately 38% to Tumi’s volume weighted average price of US$19.34 for the five days up to and including March 2, 2016, the last trading day prior to market rumors.
