Walmart to Acquire Bonobos for $310 Million in Cash

Executive Summary

• Walmart announced the signing of an agreement to acquire Bonobos, Inc., a leading apparel brand built on the Internet, for $310 million in cash.
• Following the closing, Bonobos will report to Marc Lore, President and CEO of Walmart U.S. eCommerce. The Bonobos and recently-acquired ModCloth brands will be offered on Jet.com and in a variety of countries over time.
• The acquisition, subject to regulatory approval, is expected to close toward the end of the second fiscal quarter this year, or the beginning of the third quarter.
• Bonobos offers a young and loyal male millennial customer base, which is less price-sensitive and focuses greatly on quality.
• Although the acquisition is likely to hurt profitability slightly in the short term, it can offer major benefits over the long term as Walmart scales up the brand.