Phillips-Van hEUsen buys tommy hilfiger for $3bn

Phillips-Van Heusen Corp has bought apparel maker Tommy Hilfiger BV from private-equity firm Apax Partners LP for e2.2 billion ($3 billion), adding the namesake brand to its Calvin Klein and Izod clothing lines.

Apax will get e1.92 billion in cash and e276 millionworth of Phillips-Van Heusen common stock, New York-based Phillips-Van Heusen said in a statement on Monday. Apax bought Hilfiger in 2006 for about $1.6 billion and delisted the company the same year.

The purchase will boost sales of Phillips-Van Heusen, which also owns the 159-year-old shirt maker Arrow, to $4.6 billion, the statement said. Phillips-Van Heusen is seeking brands that can grow globally and boost profitability, Chairman and Chief Executive Officer Emanuel Chirico said last week at a Bank of America Merrill Lynch investor conference.

Phillips-Van Heusen has gained 17% in New York Stock Exchange composite trading this year and rose 7 cents to $47.74 on March 12, the last day the stock traded. The company has a market value of about $2.5 billion.
Apax had been expected to get $3.4 billion for Tommy Hilfiger, JPMorgan Chase & Co. analysts Christopher Kim and Brian Tunick wrote in a March 9 research note.

Tommy Hilfiger in January 2008 delayed an initial public offering in Amsterdam after stock markets tumbled. Apax and Tommy Hilfiger CEO Fred Gehring have sought to revive the brand for almost five years, as U.S. and European teenagers defected to labels such as Abercrombie & Fitch Co.

Tommy Hilfiger first sold shares in 1992 and increased annual revenue to almost $2 billion in 2000 after its red-white- and-blue-splashed clothing became popular with musicians including rapper Snoop Dogg. Revenue in the year ending March 31 may total $2.25 billion, with about 34 percent of that coming from U.S. markets, according to today's statement.

The clothing company was started in 1985 by its Elmira, New York-born namesake designer, who opened a boutique while still a high-school student. Hilfiger will remain the principal designer, Phillips-Van Heusen said.