Highlights:
– Skechers' acquisition by 3G Capital at a significant premium over its prior market valuation showcases strong investor confidence in the company's future growth and potential.
– Transitioning from a publicly traded to a privately held entity will provide Skechers with increased operational flexibility, allowing for strategic growth initiatives without the pressures of public market scrutiny.
– The acquisition is expected to accelerate Skechers' growth through substantial investments in infrastructure, new store openings, and channel enhancements, positioning the company for sustained expansion under experienced leadership.
Summary
Skechers, the American footwear company known for its lifestyle and performance shoes, agreed in 2024 to be acquired by 3G Capital, a global investment firm, in a take-private transaction valued at approximately $9 billion. The deal, which offers Skechers shareholders a premium of about 28–30% over the company’s prior market valuation, was unanimously approved by Skechers’ board of directors and is expected to close in the third quarter of 2025, subject to customary regulatory approvals and closing conditions. Following the announcement, Skechers’ shares surged more than 25%, reflecting strong investor confidence in the transaction and the company’s future prospects.
The acquisition structure provides shareholders with the option of a full cash payout or a mixed consideration combining cash and equity units in a new private parent company, with the mixed option capped at 20% of shares and subject to transfer restrictions. Financing for the transaction will be secured through 3G Capital’s funds and debt financing arranged by JPMorgan Chase Bank, N.A. Skechers will transition from a publicly traded company to a privately held entity, enabling greater operational flexibility to pursue strategic growth initiatives without the pressures of public market scrutiny.
3G Capital cited Skechers’ status as a founder-led brand with a strong track record of creativity, innovation, and global expansion potential as key factors motivating the acquisition. Skechers’ Chairman and CEO Robert Greenberg, who will remain in leadership post-acquisition, described the deal as a new chapter poised to accelerate the company’s growth through investments in infrastructure, new store openings, and enhancements to both wholesale and direct-to-consumer channels. The partnership is expected to support capital expenditures estimated between $375 million and $400 million to bolster Skechers’ competitive positioning worldwide.
Despite near-term uncertainties including tariffs, supply chain challenges, and inflationary pressures, 3G Capital expressed confidence in Skechers’ long-term growth outlook. Nonetheless, risks related to global economic conditions, currency fluctuations, and geopolitical tensions continue to be monitored as potential impacts on the company’s operations and market demand. The acquisition represents a significant strategic milestone for Skechers, positioning it for sustained expansion under private ownership and experienced leadership.
Background
In 2024, 3G Capital announced its plan to acquire Skechers in a take-private transaction, reflecting confidence in the long-term growth potential of the footwear company despite short-term uncertainties such as tariffs. Skechers, led by Chairman and CEO Robert Greenberg, has demonstrated resilience amid challenges including supply chain disruptions, fluctuating international economic conditions, inflation, and competitive retail markets in the United States.
The transaction offers shareholders the option of a full cash payout or a mixed consideration involving cash and equity units in a new private parent company, with the latter option capped at 20% of shares and subject to transfer restrictions. Financing for the deal will be secured through a combination of 3G Capital’s funds and debt arranged by JPMorgan Chase.
3G Capital highlighted Skechers as an iconic, founder-led brand known for creativity and innovation, underpinning their belief in the company’s strong growth prospects through strategic infrastructure investments, global expansion, and solid performance across wholesale and direct-to-consumer channels. Following completion of the acquisition, Skechers’ management team is expected to remain in place to guide the company’s future operations and expansion efforts.
Acquisition Details
In 2024, Skechers agreed to be acquired by the investment firm 3G Capital in a take-private deal valued at approximately $9 billion. The transaction, unanimously approved by the Skechers board of directors—including an independent committee of directors—is considered a transformational long-term partnership intended to further develop Skechers as a global leader in both lifestyle and performance footwear. The deal is expected to close in the third quarter of 2025, subject to customary closing conditions and regulatory approvals.
3G Capital, known for its significant investments in the food and beverage sector through companies like Kraft Heinz, offered $63 per share in cash for Skechers, representing a 28% to 30% premium over the company’s prior market valuation. Upon announcement of the deal, Skechers’ shares surged more than 25%, reaching $61.90 in premarket trading.
Shareholders are given the option to receive either a full cash payout or a mixed consideration consisting of $57 in cash plus one equity unit in a new private parent company, with the mixed option capped at 20% of shares and subject to transfer and disclosure restrictions. After closing, 3G Capital will own approximately 80% of the new LLC’s outstanding units, depending on conversions and final capital structure.
The acquisition will be financed through a combination of cash provided by 3G Capital and debt financing committed by JPMorgan Chase Bank, N.A.. Greenhill and J.P. Morgan Securities acted as exclusive financial advisors to Skechers and 3G Capital, respectively, while Latham & Watkins LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP served as lead legal counsel for the respective parties.
Skechers’ Chairman and CEO Robert Greenberg described the transaction as the beginning of a new chapter for the company, highlighting its three decades of growth and innovation, now poised to advance further in partnership with 3G Capital.
Financial Impact
The acquisition involves a purchase price that represents a 30% premium over Skechers’ current valuation on the public markets, consistent with premiums seen in similar takeover deals. Prior to the deal, Skechers reported cash, cash equivalents, and investments totaling $1.55 billion as of December 31, 2023, marking an increase of $161.4 million, or 11.6%, from the previous year-end. This rise was primarily driven by earnings and borrowings amounting to $63.9 million but was partially offset by capital expenditures of $169.5 million and share repurchases totaling $120.0 million. Inventory levels also declined by 16.1%, or $292.6 million, to $1.53 billion compared to December 31, 2022, indicating effective inventory management during the period.
During 2023, the company repurchased 3.2 million shares of its Class A common stock at a cost of $160.1 million, including 1.1 million shares bought back in the fourth quarter for $60.0 million. Additionally, Skechers made payments of $70.4 million, net of cash acquired, related to the acquisition of its Scandinavian distributor.
Strategic Implications
The acquisition marks a significant strategic milestone for Skechers, transitioning it from a publicly traded entity to a privately held one. The $63 per share cash offer represents a substantial premium of approximately 28–30% over the stock’s recent trading price, reflecting strong investor confidence in the company’s future under new ownership. This privatization move is designed to provide Skechers with the flexibility and resources needed to accelerate its growth initiatives without the pressures of quarterly public market scrutiny.
Under the new ownership structure, Skechers will continue to benefit from the leadership of its longstanding Chairman and CEO, Robert Greenberg, ensuring strategic continuity during the transition. This leadership stability is expected to support ongoing execution of the company’s growth plans, which include expanding its global footprint, enhancing its omnichannel retail presence, and investing in infrastructure.
3G Capital’s acquisition aligns with its broader investment philosophy focused on growth and operational excellence. The firm has expressed confidence in Skechers’ long-term potential and has no immediate concerns about external challenges such as overseas tariffs impacting the company’s profitability. Furthermore, insiders familiar with the transaction have indicated that the deal was driven by strategic opportunity rather than external trade pressures, with 3G Capital having pursued the acquisition over several years.
The partnership is anticipated to strengthen Skechers’ competitive positioning by enabling significant capital expenditures projected in the range of $375–400 million. These investments will support key initiatives such as new store openings, enhancements to distribution networks, and expansion of the company’s product portfolio, which spans fashion, athletic, and work footwear segments. Additionally, 3G Capital’s experience and resources are expected to aid Skechers in scaling its operations globally and optimizing both wholesale and direct-to-consumer channels.
Legal and Regulatory Aspects
The acquisition involves multiple legal and regulatory considerations. Greenhill, a Mizuho affiliate, served as the exclusive financial advisor to Skechers, while Latham & Watkins LLP acted as lead legal counsel. On the other side, J.P. Morgan Securities LLC was the exclusive financial advisor to 3G Capital, with Paul, Weiss, Rifkind, Wharton & Garrison LLP as lead legal counsel and Kirkland & Ellis LLP providing financing legal counsel.
Following the closing of the transaction, 3G Capital is expected to hold approximately 80% of the new limited liability company’s (New LLC) outstanding units, although the exact figure depends on the number of Skechers shares that convert into the Mixed Election Consideration and the finalized capital structure. The New LLC will terminate its periodic reporting obligations under the Securities Exchange Act of 1934 as soon as practicable after closing. Additional details regarding the capital structure and pro forma financial information of the New LLC will be disclosed in the forthcoming Form S-4 and related information statement.
No further actions by other Skechers stockholders are required to approve the transaction, which remains subject to customary closing conditions, including obtaining all necessary regulatory approvals. The deal is anticipated to close in the third quarter of 2025. Financing will be provided through a combination of cash from 3G Capital and debt financing committed by JPMorgan Chase Bank, N.A..
Aftermath and Developments
Following the announcement of the take-private deal, Skechers’ shares soared by 25%, reflecting strong investor confidence in the transaction and the company’s future prospects. The acquisition, unanimously approved by Skechers’ board of directors including an independent committee, represents a transformational long-term partnership with 3G Capital, a leading global growth-focused investor. The transaction is expected to close in the third quarter of 2025, pending customary closing conditions and regulatory approvals.
Post-acquisition, Skechers will continue to be led by Chairman and CEO Robert Greenberg along with his current management team, ensuring continuity in leadership and strategic direction. 3G Capital’s co-managing partners, Alex Behring and Daniel Schwartz, emphasized Skechers’ strong brand identity and track record of creativity and innovation as key assets driving the partnership.
Financially, Skechers is positioned for solid growth, with an increase in its earnings per share forecast to $4.20–$4.25 from the previous range of $4.08–$4.18, up from $3.49 in the prior year. The company plans to invest $375–$400 million in capital expenditures to support strategic initiatives such as new store openings, omnichannel expansion, and enhancements to its distribution infrastructure. These investments aim to strengthen both wholesale and direct-to-consumer segments, providing robust growth potential.
While short-term uncertainties remain due to factors like tariffs, 3G Capital remains optimistic about Skechers’ long-term outlook and growth opportunities. The partnership is expected to further position Skechers as a global leader in both lifestyle and performance footwear through sustained expansion and operational enhancements.
Nonetheless, risks related to global economic conditions, supply chain disruptions, inflation, currency fluctuations, and geopolitical conflicts continue to be monitored closely, as these could impact business operations and demand within key markets such as the United States. The company remains focused on managing these challenges through prudent forecasting and maintaining proper inventory levels to sustain growth.
The content is provided by Avery Redwood, Front Signals
