TORONTO, Jan. 14, 2013 /CNW/ - Harry Winston Diamond Corporation
(TSX:HW, NYSE:HWD) (the "Company") announces today that it has entered
into an agreement to sell its luxury brand diamond jewelry and
timepiece division, Harry Winston Inc., to The Swatch Group Ltd. for
US$750 million plus their assumption of up to US$250 million of pro
forma net debt.
Chairman and Chief Executive Officer, Robert Gannicott said, "At the time that we purchased the Harry Winston brand, resource
investment opportunities for diamonds were rare and expensive following
the euphoria of the Canadian diamond discoveries, and the involvement
of the large international mining companies. The Harry Winston brand
was competitively priced compared with its peers and we could bring
diamond expertise and strategic connections to enhance value. Today
there is a range of diamond resource opportunities while the value of
heritage luxury brands has increased dramatically. This transaction
represents a sound return on our original investment. It will leave us
well equipped to realize upstream opportunities in an environment where
cash has become a strategic resource while preserving and expanding our
relationship with the downstream diamond business."
The Swatch Group, with its unparalleled combination of expertise in both
engineering and brand management, is the perfect home for such a
prestigious brand. Under the terms of the purchase agreement, the
Company has agreed to trade under a new name as of the time of closing
of the transaction and will therefore change its name to Dominion
Diamond Corporation. The Company will retain an ongoing relationship
with The Swatch Group, one of the world's largest buyers of polished
diamonds, in sourcing polished diamonds for them. The two companies
will also explore the opportunities for a joint diamond polishing
venture bringing together the manufacturing and diamond expertise of
the two companies.
After repayment of debt this transaction will net the Company US$750
million. Rothschild advised the Company on the transaction and provided
a fairness opinion.
Nayla Hayek, Chairwoman of The Swatch Group Ltd., said, "Harry Winston brilliantly complements the prestige segment of the
Group. We are proud and happy to welcome Harry Winston to the Swatch
Group family - diamonds are still a girl's best friend."
The transaction is subject to receipt of a variety of regulatory
approvals and other customary closing conditions.
Forward Looking Statement
This news release contains forward-looking information relating to the
proposed sale of the luxury brand diamond jewelry and timepiece
division of Harry Winston Diamond Corporation and other information or
statements that are not historical facts. Such forward-looking
information is subject to important risks, uncertainties and
assumptions, including risks relating to the timing of, and ability to
satisfy, the necessary conditions to closing, including the receipt of
all necessary regulatory approvals. The results or events predicted in
forward-looking information may differ materially from actual results
or events. As a result, readers are cautioned not to place undue
reliance on forward-looking information, which speaks only as of the
date of this disclosure, and should not rely upon this information as
of any other date. While Harry Winston Diamond Corporation may elect
to, it is under no obligation and does not undertake to, update or
revise any forward-looking information, whether as a result of new
information, further events or otherwise at any particular time, except
as required by law. Additional information concerning factors that may
cause actual results to materially differ from those in such
forward-looking statements is contained in Harry Winston Diamond
Corporation's filings with Canadian and United States securities
regulatory authorities and can be found at www.sedar.com and www.sec.gov, respectively.
About Harry Winston Diamond Corporation
Harry Winston Diamond Corporation is a diamond enterprise with premium
assets in the mining and retail segments of the diamond industry. Harry
Winston supplies rough diamonds to the global market from its 40
percent ownership interest in the Diavik Diamond Mine. The Company's
luxury brand segment is a premier diamond jeweler and luxury timepiece
retailer with salons in key locations, including New York, Paris,
London, Beijing, Shanghai, Hong Kong, Singapore, Tokyo and Beverly
Hills.
The Company focuses on the two most profitable segments of the diamond
industry, mining and retail, in which its expertise creates shareholder
value. This unique business model provides key competitive advantages;
rough diamond sales and polished diamond purchases provide market
intelligence that enhances the Company's overall performance.
SOURCE: Harry Winston Diamond Corporation
