Executive Summary

• Coach announced on Monday, May 8, that it has signed a definitive agreement to acquire Kate Spade for $2.4 billion in an all-cash transaction. The transaction is equal to $18.50 per share, a 27.5% premium to the unaffected closing price of Kate Spade shares on December 27, 2016.
• The acquisition is part of Coach’s plan to become a multibrand, modern luxury lifestyle company; aside from the Coach brand, it also owns the Stuart Weitzman brand. The company will operate Kate Spade separately from the Coach brand, as it does Stuart Weitzman.
• Coach management believes that Kate Spade’s strong appeal among millennials, which constitute about 60% of the brand’s customers, will help the company drive future growth.