Coach Inc. said Tuesday it is buying luxury footwear brand Stuart Weitzman from private equity firm Sycamore Partners, in a deal valued at up to $574 million. Coach will make an initial cash payment of about $530 million, and will make up to $44 million in contingent payments in the three years after the deal closes, if it achieves certain revenue targets. Coach will finance the deal using cash on hand or by tapping the credit and capital markets. The deal is expected to boost per-share earnings and to close by May. Stuart Weitzman had net revenues of about $300 million in the 12 months ended Sept. 30, 2014. Coach shares were not yet active in premarket trade, but have gained 5.8% in the past three months, while the S&P 500 has gained 2.8%.
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