The mergers and acquisitions streak continues as the retail industry embraces this trend. The latest being the acquisition of Ann Inc (NYSE:ANN) by Ascena Retail Group Inc (NASDAQ:ASNA) for a $2.15 billion consideration.
Ascena is the retail company that manages the likes of Lane Bryant women’s clothing stores and Dressbarn. The company agreed to a contract with Anne Inc for an acquisition worth $2.15 billion. The two companies that deal with a similar line of products came to various terms following talks.
Ascena proposed that it would give 0.68 of its shares for every share from Ann Inc and also pay $37 in cash. That is the equivalent of $47 per share which represents Ann Inc’s Friday closing price of $38.71.
Following the release of the news, Ann Inc’s shares went up over the weekend to open at $15.20, an increase of about 7%.the buyout will give the company an asset value of about $2 billion. Ascena claims that they expect the first period after the acquisition to reflect the lucrative nature of the deal.
Anticipated profits are expected to go up by 20%. With the newly added LOFT and Anna Taylor brands, Ascena can grow into one of the biggest designer apparel retail company in America. Ascena’s Vice President, David Jaffe claimed that the two companies expect the acquisition to finalize by the end of June.
The two retail firms are currently in between talks to negotiate the remaining terms, while they also await the approval from the relevant governing and inspecting bodies. Ascena Retail Group Inc (NASDAQ:ASNA) is very optimistic about the future of the brand, especially with the new additions. However, no further information has been revealed about how both companies plan to allocate their resources.
The new merger has the makings of a potential market leader, and if the two play their cards right, they have the opportunity to make massive influence in the apparel industry. The newly found avenues are a great opportunity to expand the brand. Jumping onto the online train will boost sales even further.
