Movado Group’s Acquisition of MVMT

Movado Group’s financial advisor for this transaction is Centerview Partners LLC and its legal advisor is Paul, Weiss, Rifkind, Wharton & Garrison LLP. MVMT’s financial advisor is Rothschild & Co and its legal advisor is Cooley LLP.

Movado Group, Inc. (NYSE:MOV) has entered into a definitive agreement to acquire MVMT Watches Inc., the owner of MVMT (“MVMT”), a global aspirational lifestyle brand. The purchase price is comprised of an initial payment of approximately $100 million, or approximately $85 million net of tax benefits that are anticipated to be generated from the acquisition, and two future contingent payments that combined could total up to an additional $100 million before tax benefits. The exact amount of the future payments will be determined by MVMT’s future financial performance with no minimum required future payment. The acquisition will be funded through cash and borrowings under the Company’s revolving credit facility. The purchase price will be subject to working capital and other closing adjustments. The closing of the acquisition is subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act, and is expected to close on or about October 1, 2018.

MVMT was founded by Jacob Kassan, 27, and Kramer LaPlante, 26, in Los Angeles in 2013, initially selling watches and later adding sunglasses and accessories in 2017. Since inception, MVMT has experienced significant growth with expansion into 160+ countries largely through a leading direct-to-consumer business model. MVMT products are designed for the millennial consumer with the goal of changing the way the customer thinks about fashion by delivering high quality watches and accessories at an affordable price. MVMT’s world-class digital strategy has driven high brand awareness across social media with an active community of 4.5 million followers, in addition to strong customer acquisition, and category leading site traffic. MVMT products are primarily sold through its global e-commerce site and also a few select retailers in the United States such as Nordstrom and Bloomingdales. MVMT has approximately 40 employees, all based in its head office in Los Angeles. Kassan and LaPlante have been recognized as leaders in the field of ecommerce having been named to Forbes 30 under 30.

In its last fiscal year ended December 31, 2017, MVMT achieved revenue of approximately $71 million. Upon closing, Movado Group expects the transaction to be accretive to its fiscal 2019 results, exclusive of transaction-related charges and the amortization of anticipated purchase accounting adjustments. Movado Group will discuss the transaction in more detail when it reports its second quarter fiscal 2019 results.

MVMT will continue to operate under the leadership of founders Jake Kassan and Kramer LaPlante, who are expected to retain MVMT’s talented team in Los Angeles.

Paul, Weiss advised Swiss watchmaker Movado Group, Inc. with a team including Ellen Ching (Picture) and Lawrence Wee and counsel Stephen Koo; tax partners Patrick Karsnitz and David Mayo; intellectual property partner Claudine Meredith-Goujon; employee benefits partner Lawrence Witdorchic and counsel Uri Horowitz; real estate partner Salvatore Gogliormella; antirust counsel Marta Kelly; and environmental counsel William O’Brien.

Cooley advised MVMT with a team including Nick Hobson, Josh DuClos, Steven M Dunst, Cameron Hajialiakbar, Alexander Lee, Barbara Mirza, Ross Eberly, John Crittenden, Thomas Connors, Jacqueline Grise and Sharon Connaughton.

Involved fees earner: Nick Hobson – Cooley LLP; Josh DuClos – Cooley LLP; Steven Dunst – Cooley LLP; Cameron Hajialiakbar – Cooley LLP; Alexander Lee – Cooley LLP; Barbara Mirza – Cooley LLP; Ross Eberly – Cooley LLP; John Crittenden – Cooley LLP; John Paul Oleksiuk – Cooley LLP; Thomas Connors – Cooley LLP; Jacqueline Grise – Cooley LLP; Sharon Connaughton – Cooley LLP; Ellen Ching – Paul Weiss Rifkind Wharton & Garrison; Lawrence Wee – Paul Weiss Rifkind Wharton & Garrison; Stephen Koo – Paul Weiss Rifkind Wharton & Garrison; Patrick Karsnitz – Paul Weiss Rifkind Wharton & Garrison; David Mayo – Paul Weiss Rifkind Wharton & Garrison; Claudine Meredith-Goujon – Paul Weiss Rifkind Wharton & Garrison; Uri Horowitz – Paul Weiss Rifkind Wharton & Garrison; Lawrence Witdorchic – Paul Weiss Rifkind Wharton & Garrison; Salvatore Gogliormella – Paul Weiss Rifkind Wharton & Garrison; Marta Kelly – Paul Weiss Rifkind Wharton & Garrison; William O’Brien – Paul Weiss Rifkind Wharton & Garrison;

Law Firms: Cooley LLP; Paul Weiss Rifkind Wharton & Garrison;

Clients: MVMT Watches Inc.; Movado Group, Inc.;

Author: Ambrogio Visconti