US: Neiman Marcus agrees $6bn takeover deal
Upscale department store retailer Neiman Marcus is to be acquired by Ares Management and Canada Pension Plan Investment Board (CPPIB) in a deal worth US$6bn.
The Dallas, Texas-based retailer, which operates 41 Neiman Marcus stores, two Bergdorf Goodman and 36 Last Call outlet centres, as well as its online website, was taken private by TPG Capital and Warburg Pincus eight years ago.
A portion of the purchase price will be used to repay all amounts outstanding under the company's existing credit facilities other than its debentures.
Ares and CPPIB will hold an equal stake in the retailer, while the company's management will retain a minority stake.
David Kaplan, senior partner and co-head of the private equity group of Ares, said: "This investment fits with our longstanding approach of accelerating growth in companies in the consumer and retail sectors."
The transaction is expected to close in the fourth quarter of 2013, subject to regulatory approvals and other customary closing conditions.
André Bourbonnais, senior vice president of private Investments at CPPIB, said: "We believe the company's strong market position, combined with an expected increase in US luxury goods spending, provide attractive opportunities for future growth."
The deal comes after the retailer revealed plans to raise up to US$100m from an initial public offering (IPO) of its common stock in June. The group also reported a 13% increase in third-quarter profit to reach $70.8m, boosted by higher sales.
The sale is the second in the luxury retail sector in recent months after Canadian department store retailer Hudson's Bay Company in July revealed plans to acquire US retailer Saks in a deal worth US$2.9bn.
That agreement brings together the Hudson's Bay, Lord & Taylor and Saks Fifth Avenue brands into a combined company, which will operate 320 stores.
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Upscale department store Neiman Marcus Group moved to a net loss in its second quarter as costs related to a data breach hit earnings....
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