Ascena Retail Group To Acquire ANN For $47/shr In Accretive Transaction

(RTTNews) - ascena retail group, inc. (ASNA) and ANN INC. (ANN) announced that they have entered into a definitive merger agreement under which ascena will acquire ANN INC. for a combination of cash and stock in an accretive transaction.

As per terms of the transaction, upon closing, ANN INC. stockholders will receive $37.34 in cash and 0.68 of a share of ascena common stock in exchange for each share of ANN common stock.  Based upon the closing price of ascena stock on May 15, 2015, this implies a price per share of $47.00, a 21.4% premium over the closing price of ANN shares on Friday, May 15, 2015.  At closing, ANN stockholders will own approximately 16% of ascena.

The transaction, which has been unanimously approved by the Boards of Directors of both companies, is expected to close in the second half of 2015. The transaction does not require approval by ascena stockholders.

Excluding transaction and integration expenses, the acquisition is expected to be significantly accretive to earnings per share in the first year post closing, accelerating to greater than 20% accretion to earnings per share thereafter. Additionally, ascena expects the combination to generate significant cash flow while both maintaining appropriate levels of capital expenditures and enabling rapid deleveraging.