Luxury fashion group Michael Kors signed a definitive agreement to acquire all of the outstanding shares of Italian luxury fashion house Gianni Versace for a total enterprise value of €1.83 billion ($2.12 billion).

“The acquisition of Versace is an important milestone for our group. Versace was founded in 1978. For over 40 years, Versace has represented the epitome of Italian fashion luxury, a testament to the brand’s timeless heritage,” said John D. Idol, chairman and CEO of Michael Kors Holdings.

“This is a very exciting moment for Versace,” said Donatella Versace. “It has been more than 20 years since I took over the company along with my brother Santo and daughter Allegra. I am proud that Versace remains very strong in both fashion and modern culture. Santo, Allegra and I recognize that this next step will allow Versace to reach its full potential.”

The combined company will be rebranded as Capri Holdings.

The transaction is not subject to a financing condition. The cash portion of the purchase price is expected to be funded by a combination of cash on hand, drawings under the company’s existing revolving credit facility, and committed underwritten bank term loans from the company’s advisors JPMorgan Chase Bank and Barclays. The Versace family will also receive €150 million ($176 million) of the purchase price in shares of Capri Holdings. The transaction is expected to close in the company’s fourth fiscal quarter, subject to specified closing conditions, including the receipt of

Capri Holdings is the new name to be adopted by Michael Kors Holdings Limited upon the closing of the acquisition. The name is inspired by the fabled island which has long been recognized as an iconic, glamorous and luxury destination.