Jos. A. Bank Clothiers signed a definitive agreement to acquire Eddie Bauer in a cash and stock deal that values the outdoor apparel and gear brand at $825 million. The transaction value is approximately one times Eddie Bauer’s 2013 estimated revenue and 9.5 times its estimated 2013 adjusted EBITDA, including $25 million of potential pro forma synergies.
The purchase price for Eddie Bauer consists of a combination of $564 million in cash and approximately 4.7 million new shares of common stock to Everest Topco, a unit of Golden Gate Capital, at $56 per share, a premium to the pre-announcement share price. The final share count is subject to adjustment based on the number of shares tendered in the issuer tender offer. Everest Topco will also have the right to earn up to an additional $50 million in cash based on Eddie Bauer’s EBITDA for fiscal 2014.
Under the terms of the Agreement, Jos. A. Bank will have the right to terminate its agreement to acquire Eddie Bauer in the event an unsolicited offer is made to acquire Jos. A. Bank that the company’s board determines would reasonably be expected to create greater value for its shareholders than the Eddie Bauer transaction.
Following the closing of the Eddie Bauer acquisition and issuer tender offer, Everest Topco will own approximately 16.6% of the Jos. A Bank’s outstanding shares and will have the right to designate two directors on the Company’s Board of Directors.
