Under the terms of the deal, Disney Store North America will operate as a wholly owned subsidiary of Children's Place, which has the exclusive right to operate the Disney stores in the US and Canada under a long-term license and conduct of business agreement. The new subsidiary will be responsible for its store lease obligations.

Children's Store acquired Disney Store's equity from the Walt Disney Co. in exchange for a $101 million working capital payment, funding the transaction with a combination of cash on hand and short-term borrowings. In connection with the acquisition, Children's Place has established a separate $100 million working capital facility for its new subsidiary through Wells Fargo Retail Finance.

"This acquisition marks a significant milestone in [our] growth," Ezra Dabah, chairman/CEO of Children's Place said in a written statement. "We believe that the Disney brand together with our retail expertise will be a powerful and profitable combination."

"The Children's Place management has a proven track record of growing a unique and compelling retail concept," says Peter E. Murphy, senior EVP of the Walt Disney Co. "We believe [they] will maximize the Disney Store concept.

Disney Store North America will continue to design, source and sell merchandise featuring Disney-branded characters. Following a two-year abatement, the subsidiary will start paying royalties to the Walt Disney Co. based on actual store sales. Also in the works, starting in about a year, Disney Store will operate an Internet store, and the chain will continue operating the Disney catalog.

Finally, Children's Store, which operates more than 730 of its own stores in the US, Canada and Puerto Rico, has announced that it will invest upwards of $100 million to remodel Disney Store's units and to revamp its overall operations. Of that total, an initial $50 million was provided at the closing of the acquisition.