Investment Firm Buys Tommy Hilfiger

Four months after it put itself up for sale, clothing company Tommy Hilfiger Corp. agreed to accept a $1.6-billion, or $16.80-a-share, cash bid from Apax Partners, a private investment company.

Hilfiger, known for its red, white and blue logo that resembles a signal flag in sailing regattas, expects the deal to close by spring 2006, subject to shareholder approval.

Although Apax did not detail its plans for Hilfiger, which went public in 1992, the firm is expected to be taken private. It is seen operating as a private company focused on expanding overseas and keeping its brand relevant in the U.S.

“When you are not in a public arena, you don’t have to worry as much about short-term earnings prospects,” said Robert Weible, a partner at Baker & Hostetler’s Cleveland office.

Apax’s offer for the clothing designer is a 5% premium to Hilfiger’s Thursday closing stock price of $16. Hilfiger shares closed flat at $16 on Friday.

Apax Partners operates in the U.S., Europe, Israel and Asia, and has invested in private and public companies, among them Phillips-Van Heusen, Tommy Bahama and the Children’s Place.

“This is an exciting new phase in our evolution as a global lifestyle company ... in addition to ensuring the strength of the Tommy Hilfiger brand at the higher end of the spectrum, we can continue to move ahead with the already successful global expansion,” Tommy Hilfiger, the company’s founder and principal designer, said Friday.

Hilfiger plans to remain actively involved in the company. He entered an employment agreement in which he will continue as principal designer and chairman of its strategy and design board after the deal closes.