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3G Capital just made its biggest move in yearsand it's not in fast food. The private equity giant is acquiring Skechers (NYSE:SKX) for $9.4 billion, a price tag that sent the stock flying nearly 25% at 11.27am on Monday. At $63 per share, 3G is paying up for a business that had lost more than 8% year-to-date, turning investor frustration into a windfall overnight. The deal, backed by JPMorgan financing, is expected to close in Q3 2025 and will take Skechers privateremoving one of the few major U.S. footwear companies from the public market.
This acquisition couldn't have come at a more critical moment for Skechers' financials. As the chart shows, the company's total debt ballooned to $1.92 billion by the end of 2024, while cash reserves dropped to just $1.23 billionits weakest cash-to-debt ratio in years. In contrast, Skechers ended 2023 in slightly better shape with $1.26 billion in cash and $1.68 billion in debt.
For a brand navigating macroeconomic uncertainty, pulled guidance, and tariff-driven cost pressures in China and Vietnam, the $9.4B cash infusion from 3G offers both relief and strategic breathing room.
3G isn't just betting on a comebackit's betting on quiet consistency. Skechers has always played in the underdog lane, focusing on comfort-first, affordable footwear in contrast to flashier rivals like Nike (NKE) and Adidas (ADDYY). With athlete endorsements from Joel Embiid and Harry Kane and strong footholds in China and Vietnam despite supply chain challenges, Skechers has brand equity many underestimate. 3G praised the brand as founder-led with a track record of creativity, and if past deals like Burger King are any indication, they're in it for the long haul.
This article first appeared on GuruFocus.