Jones Apparel Group (NYSE:JNY) today closed its purchase of New York-based Kasper, maker of women's suits and sportswear. The deal, which rescues Kasper from bankruptcy, will cost Jones $221 million in cash and give it access to Kasper's Anne Klein, Albert Nipon, LeSuit and eponymous brands.

It wasn't easy. Jones had to fend off rival Kellwood (NYSE:KWD), which had an agreement to buy Kasper for about $164 million before Jones upped the ante this summer. Despite having ratcheted its offer price significantly, Jones may have gotten a deal.

Last year, Kasper reported revenues of $350 million; for 2004, Jones expects between $415 and $435 million in revenues from its newly acquired lines. Jones essentially paid a multiple of roughly 0.5 times 2004 revenues. Shares of Jones, meanwhile, currently trade for about 1.1 times management's $4 billion revenue projection for next year.

Jones also expects Kasper to pitch in $0.15 per share of profits in 2004. On the back of a cocktail napkin, we can guess at what this might mean:

With 126 million shares outstanding, Kasper should contribute $19 million in 2004 net income at a net margin of 4.5% assuming Kasper hits the middle of its revenue range. Jones has managed margins just above 7%, which might imply slight margin pressure in year one. Jones, however, paid less than 12 times those earnings to acquire Kasper, but commands a multiple of closer to 15 times its own 2004 projections.

The limitations of math like this should be plain, but it's the best one can do with the information on hand. At worst, it gives us some idea of why Jones was attracted to Kasper -- and some hope that it got a pretty good deal. Though there can be no doubt it would have liked to pay $50 million less as it originally hoped.

The responsibility to make our projections a reality now lies with management. Jones must integrate Kasper's brands, processes, and people into its business while maintaining what it's already got. That's no small task, and Kasper is expected to impact on results right out of the box.

Even so, it's easy to see why Jones considered this quick boost to sales and earnings at a cut-rate price too good to pass up. Jones' history of turning around troubled brands -- Nine West was a company in flux when Jones agreed to pick it up in early 1999 -- can only further encourage investors.

Dave Marino-Nachison can be reached at