- ANN INC. Stockholders to Receive $37.34 in Cash and 0.68 of an ascena Share for
Each Share of ANN
- $150 Million in Annual
Run Rate Synergies Identified, Expected by End of the Third Year
Post-Closing
- Solid Combined Financial Profile with Strong Free
Cash Flow Generation
- Combined Company with LTM Sales Exceeding
$7.3 Billion to Operate More Than
4,900 Stores Exclusively Focused on Women's Retailing
- Conference Call Scheduled for 8:30AM EDT
MAHWAH, N.J. and NEW YORK,
May 18, 2015 /PRNewswire/
-- ascena retail group, inc. (NASDAQ: ASNA) and ANN INC.
(NYSE: ANN) today announced that they have entered into a
definitive merger agreement under which ascena will acquire ANN
INC. for a combination of cash and stock in an accretive
transaction.
Upon closing, ANN INC. stockholders will receive $37.34 in cash and 0.68 of a share of ascena
common stock in exchange for each share of ANN common stock.
Based upon the closing price of ascena stock on May 15, 2015, this implies a price per share of
$47.00, a 21.4% premium over the
closing price of ANN shares on Friday, May
15, 2015. At closing, ANN stockholders will own
approximately 16% of ascena.
The transaction, which has been unanimously approved by the
Boards of Directors of both companies, is expected to close in the
second half of 2015, subject to customary closing conditions,
including, among other things: the expiration or early termination
of the waiting period under the Hart-Scott-Rodino (HSR) Antitrust
Improvements Act of 1976 and approval of the merger by the holders
of a majority of the outstanding shares of ANN. The
transaction does not require approval by ascena stockholders.
David Jaffe, ascena's President
and Chief Executive Officer, commented: "This powerful transaction
joins two strong and highly complementary organizations and
management teams and dramatically reinforces our leadership
position in women's specialty apparel retailing. We are
excited to further leverage our uniquely capable operating platform
and exceptional combined talent to drive immediate, significant and
ongoing value for our stockholders. With the addition of the
Ann Taylor and LOFT brands, ascena will become one of North America's largest and most diversified
specialty apparel retailers, with a tremendous set of opportunities
to continue to expand its leadership position in the women's
apparel market."
ascena has identified $150 million
in annualized run rate synergies in the combination that it expects
to generate over a three-year period. The transaction aligns
seamlessly with ascena's platform strategy and shared services
model, designed to enable an effective, rapid and comprehensive
back office integration process. Synergies include sourcing and
procurement, distribution, logistics and other efficiencies.
Excluding transaction and integration expenses, the acquisition is
expected to be significantly accretive to EPS in the first year
post closing, accelerating to greater than 20% accretion to EPS
thereafter. Additionally, ascena expects the combination to
generate significant cash flow while both maintaining appropriate
levels of capital expenditures and enabling rapid deleveraging.
Ronald Hovsepian, Non-Executive
Chairman of ANN INC.'s Board of Directors, said, "Based on our
Board's thorough and wide-ranging review process, we are confident
that this agreement with ascena is in the best interests of ANN
INC.'s stockholders. Our stockholders will receive
approximately 80% of the purchase price in cash, providing
immediate and certain value, and also have the opportunity to
participate in the upside of the combined company as a result of
the stock portion of the purchase price. We are delighted with this
outcome for ANN INC.'s stockholders."
Kay Krill, President and Chief
Executive Officer of ANN INC., added, "I am very proud of all we
have accomplished and confident that combining with ascena is the
right next step for ANN INC. The transaction will make us
part of a larger organization with a diversified portfolio of
brands focused on the women's apparel market, a strong operating
platform and a powerful financial base. I have tremendous
respect and admiration for ascena's CEO David Jaffe, and our management team and I look
forward to working alongside him and other senior members of the
ascena team. As a member of the ascena family, ANN will be
poised to further enhance and grow our business as we continue to
take steps to better strategically and operationally position our
brands for the dynamics that are redefining the landscape of the
women's specialty retailing industry. At the same time, we
look forward to continuing to meet our clients' wardrobing needs by
delivering great product and a seamless brand experience across our
multiple touchpoints."
Transaction Details
Under the terms of the transaction, upon closing, ANN INC.
stockholders will receive $37.34 in
cash and 0.68 of a share of ascena common stock for each share of
ANN INC. common stock, implying a price per share of $47.00 based on the closing price of ascena stock
on May 15, 2015. The transaction
gives ANN INC. an enterprise value of approximately $2.0 billion.
ascena intends to finance the acquisition through bank debt.
Goldman, Sachs & Co. and Guggenheim Securities have arranged
committed financing for the transaction.
Guggenheim Securities and Goldman, Sachs & Co. acted as
financial advisors to ascena. Proskauer Rose LLP acted as
legal counsel to ascena in connection with the transaction.
J.P. Morgan Securities LLC acted as the exclusive financial advisor
to ANN in connection with the strategic review process and the
transaction. Wachtell, Lipton, Rosen & Katz acted as
legal counsel to ANN INC. in connection with the strategic review
process and the transaction.
Conference Call
A conference call is scheduled today at 8:30AM EDT. The telephone number for the
call is 1-888-469-3144 or 1-630-395-0231. Participant passcode:
8888702. A recorded version of the call will be available at
http://www.ascenaretail.com/investors.jsp and
http://investor.anninc.com.
About ascena retail group, inc.
ascena retail group, inc. is a leading specialty retailer
offering clothing, shoes, and accessories for missy and plus-size
women under the Lane Bryant, Cacique, maurices, dressbarn and
Catherines brands; and for tween girls under the Justice brand.
ascena Retail Group, Inc. operates through its subsidiaries
approximately 3,900 stores throughout the
United States and Canada.
About ANN INC.
ANN INC. is the parent Company of Ann Taylor and LOFT, two of
the leading women's specialty retail fashion brands in North
America. As of January 31,
2015, the Company operated 1,030 Ann Taylor, Ann Taylor
Factory, LOFT, LOFT Outlet and Lou & Grey stores in 47 states,
the District of Columbia,
Puerto Rico and Canada. The
Company's Ann Taylor and LOFT brands are also available online in
more than 100 countries worldwide at AnnTaylor.com and LOFT.com or
at our LOFT franchise stores in Mexico.
Additional Information and Where to Find It
In connection with the proposed transaction, ascena intends to
file with the SEC a registration statement on Form S-4 that will
include a proxy statement of ANN that also constitutes a prospectus
of ascena. Investors and security holders are urged to
read the proxy statement/prospectus and other relevant documents
filed with the SEC, when they become available, because they will
contain important information about the proposed
transaction.
Investors and security holders may obtain free copies of these
documents, when they become available, and other documents filed
with the SEC at www.sec.gov. In addition, investors and
security holders may obtain free copies of the documents filed with
the SEC by ascena by contacting ascena Investor Relations at
(551) 777-6895, or by e-mail at
asc-ascenainvestorrelations@ascenaretail.com. Investors and
security holders may obtain free copies of the documents filed with
the SEC by ANN by contacting ANN Investor Relations at
(212) 541-3445, or by e-mail at
investor_relations@ANNinc.com.
ascena and ANN and their respective directors and executive
officers and other members of management and employees may be
deemed to be participants in the solicitation of proxies in respect
of the proposed transaction. Information about ascena's directors
and executive officers is available in ascena's proxy statement for
its 2014 Annual Meeting of Stockholders filed with the SEC on
November 3, 2014. Information about directors and
executive officers of ANN is available in the proxy statement for
the 2015 Annual Meeting of Stockholders of ANN filed with the SEC
on April 2, 2015. Other information regarding the
participants in the proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the proxy statement/prospectus and other
relevant materials to be filed with the SEC regarding the Merger
when they become available. Investors should read the proxy
statement/prospectus carefully when it becomes available before
making any voting or investment decisions. You may obtain
free copies of these documents from ascena or ANN using the sources
indicated above.
This document and the information contained herein shall not
constitute an offer to sell or the solicitation of an offer to buy
any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the U.S. Securities Act of
1933, as amended.
Forward-Looking Statements
In addition to historical information, this document contains
forward-looking statements within the meaning of Section 27A
of the U.S. Securities Act of 1933, as amended, and
Section 21E of the U.S. Securities Exchange Act of 1934, as
amended. These forward-looking statements, which are based on
current expectations, estimates and projections about the industry
and markets in which ascena and ANN operate and beliefs of and
assumptions made by ascena management and ANN management, involve
uncertainties that could significantly affect the financial results
of ascena or ANN or the combined company. Words such as
"expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates," variations of such words and similar expressions are
intended to identify such forward-looking statements, which
generally are not historical in nature. Such forward-looking
statements include, but are not limited to, statements about the
benefits of the transaction involving ascena and ANN, including
future financial and operating results, the combined company's
plans, objectives, ratings, expectations and intentions. All
statements that address operating performance, events or
developments that we expect or anticipate will occur in the future
— including statements relating to creating value for stockholders,
integrating ascena and ANN, providing stockholders with a more
attractive currency, and the expected timetable for completing the
proposed transaction — are forward-looking statements. These
statements are not guarantees of future performance and involve
certain risks, uncertainties and assumptions that are difficult to
predict. Although we believe the expectations reflected in
any forward-looking statements are based on reasonable assumptions,
we can give no assurance that our expectations will be attained and
therefore, actual outcomes and results may differ materially from
what is expressed or forecasted in such forward-looking
statements. For example, these forward-looking statements
could be affected by factors including, without limitation, risks
associated with the ability to consummate the Merger and the timing
of the closing of the Merger; the ability to obtain requisite
regulatory approvals; the ability to successfully integrate our
operations and employees; the ability to realize anticipated
benefits and synergies of the transaction; the potential impact of
the announcement of the transaction or consummation of the
transaction on relationships, including with employees, credit
rating agencies, customers and competitors; the ability to retain
key personnel; the ability to achieve performance targets; changes
in financial markets, interest rates and foreign currency exchange
rates; negative rating agency actions; and those additional risks
and factors discussed in reports filed with the SEC by ascena and
ANN from time to time, including those discussed under the heading
"Risk Factors" in their respective most recently filed reports on
Form 10-K and 10-Q. Neither ascena nor ANN undertakes
any duty to update any forward-looking statements contained
herein.
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SOURCE ANN INC.; ascena retail group, inc.