header_bar

Free-Newsletter
 
Print Magazine sign up here
We want your news! Submit Here
 
Last Updated ( Monday, 17 February 2014 21:19 )
DATE_FORMAT_LC2=Monday,February 17 2014 12:00:00 am EST   
Jos A. Bank Enters Agreement To Buy Eddie Bauer for $825 Million

JosABankWEBJos. A. Bank Clothiers Inc. will acquire Everest Holdings LLC, the parent company of the Eddie Bauer brand.Hampstead, Md. — Men's clothing retailer Jos. A. Bank Clothiers Inc. (Nasdaq: JOSB) has entered into a definitive agreement to acquire Everest Holdings LLC, the parent company of the Eddie Bauer brand, for $825 million. The deal will include $564 million in cash and about 4.7 million new shares of common stock of Jos. A. Bank. Upon the deal's closing, Golden Gate Capital, a private equity firm that owns Everest Holdings, will become a significant shareholder of Jos. A. Bank stock.

"We have long admired the Eddie Bauer brand and its widespread appeal among those with active lifestyles and excitement about the outdoors, a large and growing customer base that overlaps significantly with ours," says Robert Wildrick, chairman of Jos. A. Bank. "I look forward to working with the two exceptional CEOs who lead these companies — Neal Black at Jos. A. Bank and Mike Egeck at Eddie Bauer — to capitalize on the combined strengths of the businesses and the substantial synergies between them in order to drive significant near and long-term growth and value creation."

As part of the deal, Everest has the right to earn up to an additional $50 million in cash based on Eddie Bauer's EBITDA for fiscal year 2014.

Jos. A. Bank also has the right to terminate the acquisition agreement if an unsolicited offer is made to acquire Jos. A. Bank that the board deems more profitable. Competitor Men's Wearhouse recently made a $1.6 billion offer to acquire Jos. A. Bank, which the company rejected. According to CNN Money, Men's Wearhouse will revaluate its options to purchase the company in light of the acquisition announcement.

"The Jos. A. Bank board of directors reviewed very carefully a number of strategic alternatives in addition to the Eddie Bauer transaction, including a possible acquisition of Men's Wearhouse and the sale of the company to Men's Wearhouse," says Wildrick. "We are convinced that our transaction with Eddie Bauer and the issuer tender offer provide the greatest value creation opportunity for Jos. A. Bank shareholders. At the same time, the company's board has preserved the ability to enter into an alternative transaction that creates greater value for our shareholders should such a transaction be proposed."

At the close of the deal, Eddie Bauer's parent company Everest will own about 16.6 percent of Jos. A. Bank's outstanding shares and will have the right to designate two directors on Jos. A. Banks' board of directors.

"Over the course of my career, I have followed the growth and success of Jos. A. Bank. On behalf of our entire team, we are excited to join forces and accelerate our progress by benefitting from the exceptional opportunities provided by the combination of our companies," says Mike Egeck, CEO of Eddie Bauer. "We feel confident that our growth and success will continue as part of Jos. A. Bank and we look forward to working with Bob Wildrick, Neal Black and the Jos. A. Bank Board and management team."

Goldman, Sachs & Co. and Financo LLC are serving as financial advisors to Jos. A. Bank, and Skadden, Arps, Slate, Meagher & Flom LLP and Guilfoil Petzall & Shoemake LLC are serving as its legal advisors. Kirkland & Ellis LLP is serving as legal advisor to Golden Gate Capital and Eddie Bauer.

Eddie Bauer was founded in 1920 in Seattle and is the largest vertically integrated retailer dedicated to outdoor clothing, according to Everest. Eddie Bauer's estimated revenue for 2013 is between $885 million and $895 million and its adjusted EBITDA is between $61 million and $65 million.

Following the acquisition, Jos. A. Bank is expected to generate $2.1 billion of revenue in 2014 and $2.2 billion in 2015.

Jos. A. Bank's stock price closed at $55.12 per share on Friday, Feb. 14, up significantly from $41.36 per share this time last year.

— John Nelson

 

Your are currently browsing this site with Internet Explorer 6 (IE6).

Your current web browser must be updated to version 7 of Internet Explorer (IE7) to take advantage of all of template's capabilities.

Why should I upgrade to Internet Explorer 7? Microsoft has redesigned Internet Explorer from the ground up, with better security, new capabilities, and a whole new interface. Many changes resulted from the feedback of millions of users who tested prerelease versions of the new browser. The most compelling reason to upgrade is the improved security. The Internet of today is not the Internet of five years ago. There are dangers that simply didn't exist back in 2001, when Internet Explorer 6 was released to the world. Internet Explorer 7 makes surfing the web fundamentally safer by offering greater protection against viruses, spyware, and other online risks.

Get free downloads for Internet Explorer 7, including recommended updates as they become available. To download Internet Explorer 7 in the language of your choice, please visit the Internet Explorer 7 worldwide page.