Harry Winston Diamond Corporation Announces Agreement to Sell its
Luxury Brand Segment to The Swatch Group Ltd.
TORONTO,
Jan. 14, 2013 /PRNewswire/ - 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