Jos. A. Bank has found a business partnerin Eddie Bauer for $825 million.
Jos. A. Bank is receiving Everest Holdings, sister company of Eddie Bauer after repeated back and forth negotiations with Men's Wearhouse in recent months Bloomberg reported Friday.
The money will come from $564 million cash, and 4.7 million in shares at $56 a piece. Jos. A. Bank will the acquisition via cash, and debt financing from Goldman Sachs Forbes reported.
"Bob Wildrick and I have spoken for a number of years about the potential of acquiring Eddie Bauer and the strong strategic sense it makes for our company," Black said in a statement Forbes reported. With this transaction, two historic 20th century American apparel brands, dedicated to quality, which have been serving different lifestyle aspects of a demographically similar family of customers, now combine to leverage their legacies and their strengths," Black said in the statement Forbes reported.
"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," Robert Wildrick chairman at Jos. A. Bank told said in a statement Forbes reported. "Based on the success of Eddie Bauer's turnaround and the outstanding opportunities a combination of our companies provides, we believe this transaction ideally positions Jos. A. Bank for the future, and Golden Gate's investment in our Company and participation on our Board is a strong endorsement of our plan," Wildrick said in the statement Forbes reported.
"Throughout the critical holiday selling season our business was robust," Neal Black, CEO at Jos. A. Bank told Bloomberg. "Unfortunately, our post-Christmas clearance sales started slowly and then the snowstorms and nationwide deep freeze significantly impacted our business in the final days of December and the first week of January," Black told Bloomberg.
Men's Wearhouse rejected Jos. A. Bank's initial $2.3 billion bid to take over the struggling retailer in October.
The Men's Wearhouse board claims the bid underestimated the company's worth and did not take the shareholders best interests into account The New York Times reported.
Men's Wearhouse also said it had twice as many stores as Jos. A Bank, and experienced 13 consecutive quarters of growth in same store sales through its main locations, while Jos A. Bank's revenue decreased three consecutive quarters.
Jos A. Bank offered to pay $48 a share in cash for Men's Wearhouse, 36 percent above its closing price in 2013. The company also indicated it would use cash on hand, sell some of its stock, and increase debt to fund the deal.
The company also joined forces with buyout firm Golden Gate Capital, who was going to invest $250 million to finance the transaction. The Men's Wearhouse board claims the bid underestimated the company's worth and did not take the shareholders best interests into account The Times reported.
Jos A. Bank originally introduced the idea to merge with its competitor three months after Men's Wearhouse let its founder and chairman George Zimmer go following a power struggle. over privatizing the company.
