Skechers USA (SKX), the world's third-largest footwear company, agreed to be taken private by PE firm 3G Capital in a deal worth $9.4 billion, or $63 per share, which represents a 30% premium.
In an interesting twist, Skechers is also offering shareholders the option of accepting cash of $57 per share, but also receiving one unlisted, non-transferable share of the privately held company for each current share they own.
The transaction is expected to close by the third quarter.
Skechers operates over 5,300 stores in 180 countries with international sales representing two-thirds of its revenue. The sneaker-maker reported record first-quarter sales of $2.4 billion two weeks ago, up 9% from the year-ago period. Last year it had record sales as well of $8.97 billion, a 13% increase from 2023. Net earnings grew 19% to $4.16 per share.
Yet SKX stock was down 27% year-to-date prior to the buyout announcement and was down 37% from its all-time hit at the end of January. It remains off 9% after yesterday's jump. If the deal goes through, the SKX stock will still have lost 6% from where it ended 2024.
Existing management will stay on with the company after the deal closes, with CEO Robert Greenberg and President Michael Greenberg continuing in their current position.
SKX stock has been a tremendous growth stock since going public in 1999, returning over 1,630% for investors compared to a 329% return for the S&P 500.
3G Capital said the acquisition is part of its strategy to back founder-led consumer brands. Last year it acquired a stake in Restaurant Brands International (QSR), the owner of Burger King, Popeyes, and Tim Horton's. It had been a long-time owner of Kraft Heinz (KHC) until it exited the position in 2023 and still owns a stake in Anheuser-Busch InBev (BUD).
