JPMorgan is set to make waves in the footwear industry with a major debt offering to support 3G Capital’s acquisition of Skechers.
JP Morgan Chase & Co. is gearing up to launch a $6.5 billion debt offering to support private equity firm 3G Capital’s acquisition of footwear giant Skechers, with the deal expected to kick off as soon as this week, according to sources familiar with the matter. This financing move comes as part of the largest buyout the sneaker industry has seen to date, with the overall transaction valued at $9.42 billion.
Deal Structure and Financing Details
The funding package is expected to include $4 billion of secured debt and $2.5 billion of unsecured debt. Notably, the unsecured tranche will feature a “payment-in-kind” (PIK) option with a toggle feature, allowing the borrower to choose whether to pay interest in cash or by issuing additional debt. This flexible structure is designed to provide 3G Capital with greater leeway as it takes Skechers private.
While it’s not yet clear if the upcoming offering will encompass the entire debt package, the market has shown renewed appetite for riskier debt in recent weeks, following a period of volatility. According to Bloomberg, recent deals have been “mostly well-received by investors,” setting a positive backdrop for the Skechers financing.
A Transformational Buyout for Skechers
Under the terms of the merger agreement, 3G Capital will pay $63 per share in cash for all outstanding shares of Skechers. Upon completion, Skechers’ common stock will be delisted from the New York Stock Exchange, and the company will become privately held.
“Over the last three decades, Skechers has experienced tremendous growth,” said Robert Greenberg, chairman and chief executive of Skechers. “Our success has been due to our commitment to excellence and innovation across the entire Skechers organisation, in-demand comfort-focused product offering and loyal partners.”
Alex Behring, co-founder and co-managing partner, and Daniel Schwartz, co-managing partner of 3G Capital, commented, “We are thrilled to be partnering with Skechers and look forward to working with an entrepreneur of Robert’s calibre and the talented Skechers team. Skechers is an iconic, founder-led brand with a track record of creativity and innovation.”
Strategic Vision and Market Impact
The buyout is backed by a significant equity contribution from 3G Capital and is scheduled to close in the third quarter of 2025. Skechers, founded in the early 1990s and now the world’s third-largest sports footwear retailer, has nearly doubled its revenue in the past five years. According to Bloomberg Intelligence retail analyst Abigail Gilmartin, the company is on track to reach $10 billion in sales by 2026.
Following the transaction, Skechers’ senior management team will continue to lead the company, executing its ongoing strategic initiatives in product innovation, international expansion, and investments in global infrastructure.
Behring and Schwartz added, “We have immense admiration for the business that the Skechers team has built, and look forward to supporting the company’s next chapter.”
Looking Ahead
As JP Morgan prepares to bring the $6.5 billion debt package to market, all eyes are on the investor response and the closing of this transformative deal. The partnership between 3G Capital and Skechers is set to usher in a new era for the brand, reinforcing its position as a global leader in lifestyle and performance footwear.
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