Coach - the misfortune of a dream deal

Abstract

This project is divided between a case study about the acquisition of Kate Spade& Co.by Coach Inc., two luxury lifestyle brands, and the correspondent Teaching Note. The case analyses the transaction and presents issues regarding the valuation of the target company, raising questions about the fairness of the acquisition price. Corporate governance issues and conflicts of interest are presented as the main factors for the company’s undervaluation. Afterwards, the case also displays post-merger integration challenges faced by the group, which resulted in a detrimental performance, with the group’s stock price dropping approximately 60% since the acquisition date.