9x Acquisition of a San Diego-based handmade bracelet co.

On June 20, 2019, it was announced that Indiana-based Vera Bradley, Inc. (NasdaqGS:VRA), an innovative women’s brand designing handbags, travel items, and accessories, entered into a definitive agreement to acquire 75% of La Jolla, California-based Creative Genius, Inc. (dba Pura Vida Bracelets) for $98 million. The deal consists of $75 million in upfront cash consideration with additional earn-out potential up to $23 million, based on achievement of a calendar year 2019 adjusted EBITDA target. Vera Bradley has the right to acquire the remaining 25% ownership interest after the fifth anniversary of closing.With reported revenue and EBITDA of $68.3 million and $13.7 million, respectively, for 2018, the enterprise value/revenue multiple translates to 1.79 and the enterprise value/EBITDA multiple translates to 8.94.

Pura Vida was founded in 2010 to provide a unique, adventurous, and socially conscious line of jewelry, bracelets, and other accessories to female millennials and Gen-Z consumers. Pura Vida’s bracelets are sourced from over 650 different artisans around the world, providing income and job opportunities across many poverty-stricken communities. The Company’s approach to digital and consumer engagement has led to millions of followers across multiple platforms, creating a powerful lifestyle brand with a loyal consumer base.

Post-transaction, Pura Vida will continue to be led by its founders and operate out of La Jolla, California. Vera Bradley will provide operational and brand expansion support.

Robert Wallstrom, CEO of Vera Bradley, sees a bright future for the highly complementary brands, stating, “We have many similarities in our value-based cultures, in our authentic brands, and in our devoted customer bases and emotional customer connections. We will provide each other invaluable support as we grow our brands together. Vera Bradley will be able to leverage Pura Vida’s expertise around digital marketing and social customer engagement, and Pura Vida will be able to leverage our product design and development, infrastructure, and back office support capabilities.”

Vera Bradley intends on funding the full purchase price with existing cash on hand and expects that the acquisition will be accretive to earnings in fiscal year 2020.

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Sources:

https://www.cnbc.com/2019/06/20/vera-bradley-acquires-a-majority-stake-in-pura-vida-bracelets.html

https://www.sdbj.com/news/2019/jun/24/pura-vida-bracelets-acquired-vera-bradley/