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PARIS — LVMH Moët Hennessy Louis Vuitton said Friday it reached an agreement with Singapore’s Koh family to jointly own and control crocodile tannery Heng Long International Ltd.
This story first appeared in the October 10, 2011 issue of WWD. Subscribe Today.
The family-run firm, founded in the Fifties, had been listed on the Singapore stock exchange since 2008.
LVMH said HLI Holding Pte. Ltd., a new entity, would make a cash offer for all outstanding shares for 160.8 million Singapore dollars, or $130.1 million at current exchange.
Following the offer, HLI is to be owned 51 percent by LVMH and 49 percent by the Koh family. Previously, the Koh family held about 74 percent of the share capital.
LVMH said the acquisition would help it procure high-quality crocodile skins for its various luxury brands, which include Fendi, Celine and Louis Vuitton, which, on Wednesday, paraded a range of coats in crocodile in pastel colors and powdery finishes.
Heng Long bills itself as one of the five “top-tier” tanneries of crocodile leather in the world, sourcing, tanning and processing up to 280,000 skins annually.
According to its Web site, more than half of Heng Long’s revenue comes from Europe, the lion’s share sold to make watch straps. It lists Prada, Stefano Ricci and Nancy Gonzales among its leather goods and accessories clients.
Citing strong demand for luxury goods, Heng Long reported net profits more than doubled in the six months to June 20 to 4.2 million Singapore dollars, or $2.4 million at average exchange rates, while revenues climbed 52.8 percent to 36.3 million Singapore dollars, or $20.6 million.