Aber Diamond Corp plans to purchase the remaining minority shareholders’ interest in Harry Winston for approximately $157 million, which will give it 100 percent ownership of one of the industry’s most fabled diamond brands.
The transaction values Harry Winston, the famed diamond brand, at approximately $330 million. Aber said it will finance the acquisition through a combination of cash resources and an increase to Aber’s existing credit facility without impacting the existing dividend policy.
Aber initially purchased a 51 percent stake in Harry Winston in April 2004 for $85 million and has since increased its equity interest to about 53 percent. The original purchase agreement included an option allowing Aber to purchase the balance of Harry Winston in 2010.
Robert Gannicott, chairman and CEO of Aber, said the partnership has shown “tangible benefits”—namely, improved margins—of linking a mining company to a retailer. Aber said full ownership of Harry Winston strengthens the diamond company’s strategic position in both market areas by allowing premium rough pricing through the insight gained by also being a polished diamond buyer. It has been able to use its position as a rough supplier to secure a more reliable source of the polished goods for the Harry Winston brand.
With Aber’s involvement, Harry Winston sales have grown from approximately $128 million in 2004, to $191 million for 2006.
Aber is looking to make “significant growth” of the Harry Winston brand, including opening new stores at an “aggressive pace”.
The Harry Winston brand is nearly a century old, and is famed for being linked with both famous diamonds (like the Hope Diamond) and famous people like Marilyn Monroe, who immortalized the brand with the line “Talk to me, Harry Winston,” in the song, “Diamonds are a Girls Best Friend”.