Tourneau, Inc., the leading U.S. watch retailer and one of the world’s largest, said Wednesday that it has “a definitive agreement” to be acquired by an investor group led by Green Equity Investors IV, L.P. for more than $300 million. The group, an affiliate of Leonard Green & Partners, L.P., includes members of the Wexler family which has owned Tourneau since 1975, and members of Tourneau’s senior management team. The transaction is expected to close in October.
The New York City-based company operates 40 stores in the United States and Caribbean under the Tourneau and Watch Gear names, and has two stores in China, the first of 30 planned over the next five years. Tourneau is forecasting net sales topping $300 million for its fiscal year ending Jan. 31, 2007.
Robert J. Wexler, Tourneau’s chief executive officer, will serve as chairman of the board. Howard R. Levitt will continue as president and become CEO. Tourneau’s current senior management team will remain intact, says the company.
“We’re pleased to partner with one of the nation’s preeminent private equity firms,” Wexler said. “This transaction allows the Wexler family to retain significant ownership and continue our active role in the business that we have owned since 1975. The ability to preserve the company’s highly successful strategy was an important element in our selection of Leonard Green as our partner.”
Levitt noted that the group has “great plans to expand the Tourneau business over the next decade and to continue [it] as the leader in the luxury timepiece market. As a result of Tourneau’s 100-plus year history, continued backing from the existing shareholders and the support of a private equity firm with extensive retail experience, the company is well positioned to achieve these plans. We think this is a tremendous partnership.”
This transaction comes in the midst of Tourneau’s strategic domestic and international expansion program this year.
Tourneau recently opened its 33rd retail store at the Pier at Caesars in Atlantic City, N.J., its sixth new U.S. store this year. It also operates seven Watch Gear mall stores.
In April, Tourneau announced its retail partnership with the Swatch Group to open watch stores in premium outlet malls across the United States.
In addition, Tourneau this year opened two stores in Shanghai, through its joint venture with the Peace Mark Group, and plans 30 in China over the next five years.
Tourneau was established in 1900.Today it distributes and retails more than 100 well-known watch brands, including Rolex, Patek Philippe, Cartier, Omega, Breitling, and Tag Heuer, plus its own Tourneau brand, in more than 8,000 styles. Tourneau’s is recognized in the Guinness World Records for its Tourneau TimeMachine in New York City, the world’s largest watch store in the world.
Leonard Green & Partners, a Los Angeles, Cal.-based private equity firm, specializes in organizing, structuring and sponsoring management buy-outs, going-private transactions and recapitalizations of established public and private companies. It manages approximately $3.7 billion of private equity capital. Its portfolio companies include Neiman Marcus Group, The Sports Authority, FTD Group, Rite Aid Corporation and Leslie’s Poolmart.