Boston, MA 02/14/2014 (wallstreetpr) – Jos. A. Bank Clothiers Inc (NASDAQ:JOSB) has signed a deal with Everest Topco LLC according to which it will acquire leading lifestyle brand Eddie Bauer LLC‘s parent company Everest Holdings LLC.
According to the deal the acquisition will require a $564 million investment in cash and another 4.7 million new shares will be paid out of the common stock of Jos. A. Bank. The stock was issued to Everest Topco at $56 a share. Everest Topco will be eligible for another $50 million in cash which will depend on Eddie Bauer’s EBITDA for the financial year 2014.
Issuer Tender Offer
The company also announced to initiate an issuer tender offer to attain up to 4.6 million of its common shares, or 16.4% of the total outstanding shares priced at $65 each, or a total of up to $300 million. However, the offer is based on the completion of the takeover of Eddie Bauer. As soon as acquisition and issuer tender offer is completed, Everest Topco will assume the authority over 16.6% of the company’s outstanding shares. Further, it will also own the right to allot two members in the company’s Board of Directors.
Combined growth and profits
Jos. A. Bank has been attracted in buying Eddie Bauer for a long time and for the last two years has been investigating potential candidates for acquisition. The company had first approached Eddie Bauer in 2012. With this move, the company is targeting to influence its core business so as to deliver more profits to its shareholders. This acquisition strengthens Bank’s leadership in men’s clothing while bringing in new categories including women’s clothing and footwear. This will help it establish itself as a diversified multi branded retailer.
Reportedly, the two brands will run independently but the combined profit to be generated is estimated to be around $25 million by the end of 2015.
