Movado Group, Inc. today announced that it has entered into a definitive agreement to acquire MVMT Watches Inc., the owner of MVMT, a global aspirational lifestyle brand.
The transaction brings distinct benefits to both parties. For Movado Group, it means digging into millennial brand category through a fast-growing brand; increasing Movado Group’s exposure to through affordable products, which are not exclusively watches, but lifestyle sunglasses and accessories; and strengthening Movado Group’s digital and direct-to-consumer capabilities. As per MVMT, the acquisition provides the brand with Movado Group’s global infrastructure and distribution network to boost MVMT’s expansion in untapped categories, channels and geographies.
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 e-commerce 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.
Efraim Grinberg, Movado Group’s Chairman and Chief Executive Officer, stated, “Jake and Kramer have built an incredible brand and business in just five years and we are excited to have MVMT join Movado Group.
Today’s announcement marks an important milestone for Movado Group. The acquisition of MVMT will provide us greater access to millennials and advances our Digital Center of Excellence initiative with the addition of a powerful brand managed by a successful team of highly creative, passionate and talented individuals. This announcement comes on the heels of last year’s successful acquisition of our millennial focused brand, Olivia Burton.
We believe significant growth opportunity lies ahead for MVMT through category, channel and geographic expansion by leveraging our scale and infrastructure. I am looking forward to welcoming Jake and Kramer, along with their 40 employees, to our Company.”
Jake Kassan, Co-founder and Chief Executive Officer of MVMT, stated, “As we looked at the future for MVMT, we felt Movado Group was the perfect fit to continue our growth. We share many of the same strategies as Movado Group including a focus on unique design, product innovation, and providing compelling value for the consumer, which aligns us on future plans for our brand and will create a smooth transition. Movado Group has the expertise and resources to help expand MVMT to many untapped markets around the world.”
Kramer LaPlante, Co-founder and Chief Operating Officer of MVMT, added, “We are thrilled to join the Movado Group family. We are eager to capitalize on the operating platform that Movado Group provides to allow MVMT to reach its full potential. We’ve long admired Movado Group’s beautiful and innovative watches and the MVMT team is very excited to become part of their powerful portfolio.”
(Source: Business Wire )