Jos. A. Bank To Buy Eddie Bauer Brand - Quick Facts

(RTTNews) - Jos. A. Bank Clothiers, Inc. (JOSB) and Golden Gate Capital announced that Jos. A. Bank has signed a definitive deal with Everest Topco LLC, a portfolio company of Golden Gate, under which Jos. A. Bank would acquire Everest Holdings LLC, the parent company of the Eddie Bauer brand. Further, the company said it would promptly begin a self-tender offer to purchase up to 4.6 million of its shares, or 16.4% of its outstanding shares, at $65 per share price, or an aggregate of up to $300 million. The issuer tender offer is conditioned on, and would close promptly following completion of, the Eddie Bauer acquisition.

The consideration price for Eddie Bauer includes a combination of $564 million cash and around 4.7 million new shares of common stock of Jos. A. Bank, issued to Everest Topco at $56 per share, a premium to the pre-announcement share price. Also, Everest Topco would have the right to earn up to an additional $50 million in cash based on Eddie Bauer's EBITDA for fiscal 2014. The purchase price represents a multiple of about 1x 2013E revenue and 9.5x 2013E Adjusted EBITDA, including $25 million of potential pro forma synergies.

Upon the closing of the Eddie Bauer purchase and issuer tender offer, Everest Topco would own nearly 16.6% of the company's outstanding shares and would have the right to designate two directors on the company's board.

This acquisition would significantly accelerate Jos. A. Bank's growth and would be immediately accretive. The combined company is likely to generate over $2.1 billion in revenue, $255-265 million of adjusted EBITDA and $3.20-3.40 of Adjusted earnings per share in 2014. In 2015, revenue is projected to be exceeding $2.2 billion, with adjusted EBITDA in the range of $325-340 million and $4.65-4.90 of Adjusted earnings per share, including the $25 million impact of synergies.

The Eddie Bauer acquisition would be financed via. a combination of cash on the balance sheet, committed debt financing provided by Goldman, Sachs & Co. and new equity issued to Everest Topco at $56 per share.