Vera Bradley signs deal to acquire majority stake in Pura Vida
Fort Wayne, Indiana-based luggage and handbag company Vera Bradley, Inc. announced on Thursday that it has signed an agreement to purchase a 75% interest in Creative Genius, Inc., which operates under the name of Pura Vida Bracelets, for a cash consideration of $75 million.
The deal also includes up to $22.5 million to be paid in incremental earnout consideration should certain performance-based targets be met by Pura Vida in 2019.
Vera Bradley will fund 100% of the purchase with its existing available cash, cash equivalents and investments, and will have the right to acquire the remaining 25% stake in Pura Vida five years after closing. The transaction is not subject to any financing conditions.
Founded by Griffin Thall and Paul Goodman in 2010, Pura Vida reported revenue of $68.3 million and net income of $3.8 million in fiscal 2018.
The company works with a network of more than 650 artisans in countries including Costa Rica, El Salvador and India to produce its bracelets, other jewelry items and accessories, and has previously partnered with over 174 global charities.
Following the closing of the acquisition, Pura Vida will continue to operate out of its current headquarters in La Jolla, California as a subsidiary of Vera Bradley. Thall and Goodman will also maintain their leadership roles.
According to Vera Bradley, the companies are “highly complementary”, sharing a similar socially connected and playful brand profile, as well as a multi-generational female customer base. The acquisition is expected to be accretive to earnings in the fiscal year ending February 1, 2020.
“The acquisition of Pura Vida is a terrific fit for Vera Bradley as we move into Year Two of our Vision 20/20 strategic plan and focus on growth,” explained Vera Bradley CEO Robert Wallstrom in a release. “As we pursue ways to increase revenues, grow shareholder value, expand our customer community, and diversify the business, Pura Vida will be a great addition to our portfolio.”
Vera Bradley expects to close the deal, which has already been approved by its board of directors, late in its second quarter of 2020. The transaction is subject to customary closing conditions.
Vera Bradley reported $416.1 million in revenue in the fiscal year ended February 2, 2019.
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