Vera Bradley, Inc., a leading American bag and luggage company and iconic lifestyle brand, today announced it has signed a definitive agreement to acquire a 75% interest in Creative Genius, Inc., which also operates under the name Pura Vida Bracelets (“Pura Vida”). Pura Vida, based in La Jolla, California, is a rapidly growing, digitally native, and highly engaging lifestyle brand that deeply resonates with its loyal consumer following. The Pura Vida brand has a differentiated and expanding offering of bracelets, jewelry, and other lifestyle accessories.
For the fiscal year ended December 31, 2018, Pura Vida reported total revenue of $68.3 million, net income of $3.8 million and adjusted EBITDA of $13.7 million. Vera Bradley’s revenues totaled $416.1 million for the fiscal year ended February 2, 2019, and as of that date, the Company had cash, cash equivalents, and investments totaling $156.6 million and no outstanding debt.
Robert Wallstrom, Chief Executive Officer of Vera Bradley, said, “The acquisition of Pura Vida is a terrific fit for Vera Bradley as we move into Year Two of our Vision 20/20 strategic plan and focus on growth. As we pursue ways to increase revenues, grow shareholder value, expand our customer community, and diversify the business, Pura Vida will be a great addition to our portfolio.
“Vera Bradley has grown into a $400+ million lifestyle brand by creating deep customer connections through fun, casual, comfortable, and affordable offerings. Likewise, Pura Vida has grown into a distinctive brand and market leader in the jewelry and accessories markets.”
Wallstrom continued, “Pura Vida is a highly differentiated lifestyle brand with uniquely strong products and amazing consumer loyalty. The brand resonates with individuals worldwide, creating a community of fun-loving, socially conscious, and stylish advocates, reflecting its potential to become a full-fledged lifestyle brand. We are thrilled to partner with founders Griffin Thall and Paul Goodman to help guide the brand to new heights.
“We have many similarities in our value-based cultures, in our authentic brands, and in our devoted customer bases and emotional customer connections. We will provide each other invaluable support as we grow our brands together. Vera Bradley will be able to leverage Pura Vida’s expertise around digital marketing and social customer engagement, and Pura Vida will be able to leverage our product design and development, infrastructure, and back office support capabilities.”
Griffin Thall and Paul Goodman, co-founders of Pura Vida, jointly noted, “We founded our company upon the ‘pura vida’ lifestyle of Costa Rica, encouraging the appreciation of life’s simple treasures. With Vera Bradley providing the financial, organizational, and operational infrastructure, the Pura Vida lifestyle can grow as high and far as we want it to. We are excited and proud to partner with a great lifestyle brand that embraces our mission to create sustainable jobs for artisans around the world and raise awareness for charities through products that give back.
“To take Pura Vida to the next level, we knew we needed a partner with a proven track record and who would be a good steward for the Pura Vida brand and company. Based on Vera Bradley’s experience building a leading authentic natural brand, they are the ideal partner to guide us through the next phase.”
“Much like Vera Bradley, Pura Vida was founded by two friends and exceptional entrepreneurs who built a dominant brand by relentlessly focusing on customer experiences and connections,” Wallstrom added. “Griffin and Paul are two visionary leaders who have brought the Pura Vida lifestyle brand to life.”
Vera Bradley has agreed to purchase 75% ownership of Pura Vida for a cash consideration of $75 million, subject to certain purchase price adjustments, and up to $22.5 million in incremental earnout consideration, subject to certain performance-based targets for calendar year 2019. The transaction is not subject to any financing conditions. Vera Bradley’s existing available cash, cash equivalents, and investments will fund 100% of the purchase price. The transaction is expected to close late in Vera Bradley’s second quarter of fiscal 2020 and is subject to customary closing conditions, including the receipt of required regulatory approvals. The Board of Directors of Vera Bradley approved the transaction.
Vera Bradley has the right to acquire the remaining 25% stake in Pura Vida five years post-closing.
Pura Vida will operate as a subsidiary of Vera Bradley from its current headquarters in La Jolla, California, and will continue to be led by Thall and Goodman.
Vera Bradley and Pura Vida are highly complementary businesses. Both companies have devoted, emotionally-connected, and multi-generational female customer bases; alignment as casual, comfortable, affordable, and fun lifestyle brands; positioning as “gifting” and socially-connected brands; strong, entrepreneurial cultures and shared values of ingenuity, tenacity, and optimism; a keen focus on community, charity, and social consciousness; complementary, multi-channel distribution strategies; and talented core leadership teams aligned and committed to the long-term success of their brands. Vera Bradley is focused on preserving Pura Vida’s brand independence and ensuring a smooth transition to the Vera Bradley family.
Vera Bradley values Pura Vida’s unique positioning as a digitally-native brand with a loyal and growing consumer following. Pura Vida will be able to utilize Vera Bradley’s infrastructure to support its growth.
Pura Vida has a strong growth profile, and the transaction is expected to be accretive to earnings in fiscal 2020 (fiscal year ending February 1, 2020).