8-K: 3G Capital Completes Skechers Acquisition, Delists Stock

3G Capital has completed its acquisition of Skechers U.S.A., Inc., taking the footwear company private in a transaction valued at $63.00 per share cash or a mix of cash and Parent Units.

Summary

• The merger of Skechers U.S.A., Inc. into Beach Acquisition Merger Sub, Inc. (an indirect subsidiary of Beach Acquisition Co Parent, LLC, an affiliate of 3G Capital Partners L.P.) was completed on September 12, 2025.
• Each outstanding share of Skechers Class A and Class B common stock was converted into the right to receive either $63.00 in cash or a mix of $57.00 in cash and one unlisted limited liability company unit of Parent.
• Skechers common stock ceased trading on the New York Stock Exchange (NYSE) effective prior to the opening of trading on September 12, 2025, and the company intends to deregister its securities.
• The acquisition was financed through new debt facilities, including $1.0 billion in 5.250% Senior Secured Notes due 2032, $2.2 billion in 10.000% / 10.750% Senior PIK Toggle Notes due 2033, a $1,555.0 million USD first lien term loan facility, a €1,250.0 million Euro first lien term loan facility (totaling $3,005.0 million USD equivalent), and a $1,600.0 million first lien cash flow revolving facility.
• The transaction also included an Investor Equity Contribution from 3G Capital and other investors, combined with Rollover Equity, representing not less than 40% of the Pro Forma Capitalization.
• The company's executive management team, including CEO Robert Greenberg and President Michael Greenberg, will continue to lead Skechers.

Sentiment

Score: 7

Explanation: The completion of a major acquisition provides certainty and a clear path forward under new ownership. While delisting and unlisted units present liquidity challenges for some shareholders, the overall transaction is a significant strategic event for the company, backed by substantial financing. The continuation of existing management is a positive sign for operational stability.

Positives

• The completion of the acquisition provides certainty for shareholders who elected the cash consideration option.
• The company will continue to be led by its existing executive management team, ensuring leadership continuity.
• The substantial credit facilities secured for the acquisition indicate strong lender confidence in the company's future under new ownership.

Negatives

• Skechers common stock has been delisted from the NYSE, removing public market liquidity for former shareholders.
• Parent Units received by some shareholders are unlisted and subject to significant transfer restrictions and covenants, limiting their liquidity and control.
• Certain management personnel and former Class B shareholders who received Parent Units are subject to non-competition, non-solicitation, and no-hire covenants.
• Legacy Holders of Parent Units have limited information rights regarding Parent's books and records or operations, except for their elected representative on the Parent Board.

Risks

• Liquidity risk for holders of unlisted Parent Units due to transfer restrictions and lack of a public trading market.
• Limited information and control rights for Legacy Holders of Parent Units regarding Parent's operations.
• Potential legal proceedings from shareholders exercising appraisal rights (Dissenting Company Shares) could result in additional liabilities.
• Significant increase in financial leverage due to the substantial debt incurred to finance the acquisition, including $1.0 billion in Senior Secured Notes, $2.2 billion in Senior PIK Toggle Notes, and $3,005.0 million in Term Loan facilities.

Future Outlook

Skechers will continue to be led by its existing executive management team. The Parent Units, issued to certain former shareholders, include provisions allowing the Legacy Holder Representative to request Parent pursue an initial public offering or change of control five years after the Parent A&R LLCA date.

Management Comments

• The Company will continue to be led by its executive management team, including Chief Executive Officer Robert Greenberg and President Michael Greenberg.

Industry Context

The acquisition by 3G Capital, a global investment firm known for its owner-operator approach, signifies a strategic move to take Skechers private. This strategy is often employed for companies with strong brand recognition and market presence, aiming to foster long-term growth and value creation away from the pressures and scrutiny of public markets. This transaction aligns with private equity trends of acquiring established companies to implement operational improvements and strategic shifts.

Management Changes

Corporate Governance

Legal Proceedings

• The filing references 'Dissenting Company Shares' and 'statutory rights of appraisal in accordance with Section 262 of the General Corporation Law of the State of Delaware,' indicating potential legal proceedings from shareholders who did not agree to the merger terms and are seeking appraisal of their shares.

Related Party Transactions

• The Buyer Parties (Beach Acquisition Co Parent, LLC and Beach Acquisition Merger Sub, Inc.) are affiliates of investment funds managed by 3G Capital Partners L.P.
• The Greenberg Family Trust, the Skechers Voting Trust, Robert Greenberg, and certain members of the Greenberg family (Greenberg Stockholders) agreed to elect to receive Mixed Election Consideration, which included Parent Units.
• Transactions entered into between Parent and Fund VI or its affiliates require the consent of the Legacy Holder Representative, unless they are on an arms-length basis and approved by the Parent Board, or are other customary arrangements.

Stakeholder Impact

• **Shareholders (Cash Election)**: Received $63.00 per share, providing immediate liquidity and a premium for their investment.
• **Shareholders (Mixed Election/Parent Units)**: Received $57.00 cash plus unlisted Parent Units, which are subject to significant transfer restrictions and limited information rights, potentially impacting their liquidity and control over the new private entity.
• **Employees/Management**: Executive officers and employees above the Senior Vice President level who received Parent Units are subject to non-competition, non-solicitation, and no-hire covenants. The existing executive management team, including Robert and Michael Greenberg, will continue to lead the company.
• **Creditors**: New debt facilities totaling approximately $6.205 billion (Senior Secured Notes, Senior PIK Toggle Notes, Term Loan facilities) and a $1.6 billion revolving credit facility have been established. Skechers and its subsidiaries are guaranteeing these obligations and providing collateral, increasing the company's financial leverage.
• **Public Market**: Skechers common stock has been delisted from the NYSE, removing public trading access and transparency for investors.

Next Steps

• Skechers U.S.A., Inc. will notify the NYSE to file Form 25 with the SEC to delist and deregister its common stock.
• After Form 25 effectiveness, the company intends to file Form 15 to deregister under Section 12(g) of the Exchange Act and suspend its reporting obligations.
• Parent intends to deregister the Parent Units under the Securities Exchange Act of 1934 as promptly as practicable.
• The Legacy Holder Representative may request Parent pursue an initial public offering or change of control five years following the date of the Parent A&R LLCA.

Key Dates

Keywords

Skechers, 3G Capital, Acquisition, Merger, Footwear, Private Equity, SEC Filing, NYSE Delisting, Debt Financing, Corporate Governance, Shareholder Rights, Parent Units