by Stephen Garner

dkny-menG-III Apparel Group, Ltd. has announced that it has completed its acquisition of Donna Karan International, Inc., parent of the Donna Karan and DKNY brands.

G-III funded the total purchase price of $650 million, subject to certain adjustments, with a combination of cash, $75 million of newly issued shares of its common stock to LVMH and a $125 million junior lien seller note, of which $75 million in principal amount has a six and a half year maturity and $50 million in principal amount has a seven year maturity. The cash portion of the purchase price was paid from the proceeds of a $350 million six-year senior secured term loan, and the balance from borrowings under a $650 million five-year senior secured asset based revolving credit facility and cash on hand. The new revolving credit facility refinanced and replaced the company’s existing credit facility.

“Donna Karan International is a transformative addition to our global portfolio of iconic brands and enhances our position as a fashion leader,” said Morris Goldfarb, chairman and chief executive officer of G-III. “We believe there is a need for these brands in the market and that DKNY alone has the potential to generate $1 billion in annual sales. Working closely with our partners and through our strong licensing network, we are confident we can quickly bring to market a comprehensive and compelling lifestyle offering that will restore the DKI brands to prominence and excite consumers. Donna Karan is an excellent growth catalyst for our company and we are well positioned to continue to capitalize on the significant opportunities ahead.”