Eddie Bauer In $614M Buyout

REDMOND, WA-A joint venture of Sun Capital Partners Inc. and Golden Gate Capital, dubbed Eddie B Holding Corp., has agreed to acquire Eddie Bauer for $9.25 per share in cash, or about $614 million, including debt to be repaid of approximately $328 million, as of Sept. 30. The sale is the culmination of an exploration of strategic alternatives initiated by Eddie Bauer in May, says a company spokeswoman.

Both she and a spokesman for Sun Capital tell GlobeSt.com that a proxy vote will be held in January, and no immediate comment can be given about the acquisition. "There's going to be a preliminary proxy statement with a detailed summary within 10 days," the spokeswoman says.

Fabian Mansson, chief executive officer of Eddie Bauer, says in a statement that the transaction will provide Eddie Bauer with new resources and the time necessary to execute its turnaround strategy. Spiegel Inc. had owned the company until 2003, when that company went bankrupt and sold its assets other than its Eddie Bauer operations. It later emerged as Eddie Bauer Holdings.

Affiliates of Sun Capital Partners, Inc. and Golden Gate Capital are active investors in the retail and consumer products industries. Among Sun Capital's current affiliated portfolio companies are Mervyn's, Shopko Stores, Lillian Vernon, Marsh Supermarkets, Anchor Blue Retail Group, Dim Branded Apparel and Most. Among Golden Gate Capital's current investments is Catalog Holdings, a $1.1-billion revenue direct marketer of women's apparel whose brands include Spiegel, Newport News, Appleseed's, Norm Thompson, Drapers and Damons, Venus, and Haband, among other titles. Other consumer-product investments include Herbalife, Eye Care Centers of America, Neways, and Leiner Health Products.

The transaction, which is anticipated to close in the first quarter of 2007, is subject to the approval of Eddie Bauer stockholders and other customary closing conditions, including Hart-Scott-Rodino antitrust review. The transaction is not subject to a financing condition, the parties say. The board of directors of Eddie Bauer has unanimously approved the merger agreement and recommends that Eddie Bauer's stockholders vote to approve the agreement.

Goldman Sachs & Co. served as Bauer's financial advisor in connection with the transaction and Goldman Sachs & Co. and William Blair & Co. each rendered separate opinions to the Eddie Bauer board as to the fairness, from a financial point of view, of the consideration to be received by Eddie Bauer's stockholders in the merger.