Perry Ellis International (NASDAQ:PERY) (“Perry Ellis” or the
“Company”) today announced it has entered into a definitive merger
agreement under which a newly formed entity controlled by George
Feldenkreis, Perry Ellis’ founder and member of the Company’s Board
of Directors, will acquire all of the outstanding common shares of
Perry Ellis not already beneficially owned by the Feldenkreis
family for $27.50 per share in cash. Additionally, the Company and
George Feldenkreis have agreed to defer the next annual meeting for
the election of directors while the merger agreement is pending.
The purchase price represents a premium of approximately 21.6
percent to Perry Ellis’ unaffected closing stock price on
February 5, 2018, the last trading day prior to George
Feldenkreis announcing his proposal to take the Company private.
The transaction is valued at approximately $437 million.
The transaction was unanimously approved by the Perry Ellis
Board of Directors, acting on the unanimous recommendation of a
Special Committee of independent directors that was granted full
authority to conduct a comprehensive strategic review and evaluate
and, if warranted, negotiate the Feldenkreis acquisition
proposal.
“The Special Committee and its advisors conducted a disciplined
and independent process to ensure the best outcome to maximize
value for shareholders. We believe, upon the closing, that this
transaction delivers an immediate cash premium and is in the best
interest of all Perry Ellis shareholders,” said J. David Scheiner,
Non-Executive Chairman of the Perry Ellis Board of Directors and
Chair of the Special Committee.
“I believe this transaction will open an exciting new chapter
for Perry Ellis, our customers and employees. The markets the
Company competes in have undergone transformative changes and I
believe that Perry Ellis’ ability to invest and innovate is limited
by the short-term pressures of being a public company. The
transaction delivers immediate value to shareholders amid an
environment of unprecedented disruption and competition. I am
confident that as a private company, Perry Ellis will be best
positioned to make investments in digital innovation, artificial
intelligence and marketing, that support our long term strategy to
grow the Company’s powerful global lifestyle brands, while
expanding into higher-margin businesses and channels of
distribution, including international, direct-to-consumer and
licensing,” said George Feldenkreis, founder and Director of Perry
Ellis.
“Since its founding, Perry Ellis has been a renowned influencer
of fashion and a magnet for highly creative individuals and brands.
The completion of this transaction will enable Perry Ellis to
preserve the integrity of its infrastructure and business units
across the United States and abroad. Our partners should benefit
from our enhanced ability to make long term investments in brands,
technology and innovation while continuing to remain focused on
executing on our long term growth strategy. Perry Ellis intends to
be at the forefront of the crucial digital transformation of the
apparel industry from marketing to e-commerce, to applications of
artificial intelligence,” said Oscar Feldenkreis, Chief Executive
Officer of the Company.
“Fortress is delighted to support the founding family of
Perry Ellis in a transaction that positions the business for growth
and success in the years to come,” said Josh Pack, Managing Partner
of Fortress Investment Group.
Following completion of the transaction, Oscar Feldenkreis will
continue to lead the company as Chief Executive Officer. George
Feldenkreis, Director and Founder, will return to an active role in
the management of the Company. Perry Ellis will continue to
be headquartered in Miami, Florida. Upon close, Perry Ellis will
become a privately held company and Perry Ellis common shares will
no longer be listed or traded on any public market.
The transaction will be financed through a Senior Secured Asset
Backed Revolving Loan Facility underwritten by Wells Fargo Bank,
N.A., a $282 million multi-tranche term financing facility provided
by Fortress Credit Advisors LLC and equity provided by the
Feldenkreis family.
The transaction, which is expected to close in the second half
of calendar year 2018, is subject to the satisfaction of customary
closing conditions and approvals, including approval by Perry Ellis
shareholders (including a majority of the shares owned by
shareholders other than the Feldenkreis family or any officers or
directors of the Company), receipt of regulatory approvals and
other customary closing conditions.
PJ SOLOMON is serving as financial advisor to the Special
Committee, Paul, Weiss, Rifkind, Wharton & Garrison LLP and
Akerman LLP are serving as the Special Committee’s legal counsel,
and Innisfree M&A Incorporated is serving as the Company’s
proxy solicitor. SCOPE Advisors LLC is serving as financial advisor
to the group led by George Feldenkreis, and Olshan Frome Wolosky
LLP and Proskauer Rose LLP are serving as legal advisor to the
group led by George Feldenkreis. Stearns Weaver Miller Weissler
Alhadeff & Sitterson is serving as legal counsel to Oscar
Feldenkreis. Kirkland & Ellis LLP is serving as legal advisor
to Fortress Credit Advisors LLC and its affiliates.
About Perry Ellis International
Perry Ellis International, Inc. is a leading designer,
distributor and licensor of a broad line of high quality men’s and
women’s apparel, accessories and fragrances. The Company’s
collection of dress and casual shirts, golf sportswear, sweaters,
dress pants, casual pants and shorts, jeans wear, active wear,
dresses and men’s and women’s swimwear is available through all
major levels of retail distribution. The Company, through its
wholly owned subsidiaries, owns a portfolio of nationally and
internationally recognized brands, including: Perry Ellis®, An
Original Penguin® by Munsingwear®, Laundry by Shelli Segal®,
Rafaella®, Cubavera®, Ben Hogan®, Savane®, Grand Slam®, John
Henry®, Manhattan®, Axist®, Jantzen® and Farah®. The Company
enhances its roster of brands by licensing trademarks from third
parties, including: Nike® and Jag® for swimwear, and Callaway®, PGA
TOUR®, Jack Nicklaus® for golf apparel and Guy Harvey® for
performance fishing and resort wear. Additional information on the
Company is available at http://www.pery.com.
About George Feldenkreis
George Feldenkreis is the founder of Supreme International,
which started designing and importing apparel in 1967, eventually
went public in 1993, and changed its name to Perry Ellis
International, Inc. upon completing the acquisition of the brand in
2000. George Feldenkreis has been an owner of the Company for over
50 years, its president, CEO, and Chairman of the Board since 1967
until September 2017, and continues to be a member of the
Board.
Safe Harbor Statement
We caution readers that the forward-looking statements
(statements which are not historical facts) in this release are
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are based on current expectations rather than historical
facts and they are indicated by words or phrases such as
“anticipate,” “believe,” “budget,” “contemplate,” “continue,”
“could,” “estimate,” “expect,” “guidance,” “indicate,” “intend,”
“may,” “might,” “plan,” “possibly,” “potential,” “predict,”
“probably,” “proforma,” “project,” “seek,” “should,” “target,” or
“will” or the negative thereof or other variations thereon and
similar words or phrases or comparable terminology. Such
forward-looking statements include, but are not limited to,
statements regarding Perry Ellis’ strategic operating review,
growth initiatives and internal operating improvements intended to
drive revenues and enhance profitability, the implementation of
Perry Ellis’ profitability improvement plan and Perry Ellis’ plans
to exit underperforming, low growth brands and businesses. We have
based such forward-looking statements on our current expectations,
assumptions, estimates and projections. While we believe these
expectations, assumptions, estimates and projections are
reasonable, such forward-looking statements are only predictions
and involve known and unknown risks and uncertainties, and other
factors that may cause actual results, performance or achievements
to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements, many of which are beyond our control. These factors
include: general economic conditions, a significant decrease in
business from or loss of any of our major customers or programs,
anticipated and unanticipated trends and conditions in our
industry, including the impact of recent or future retail and
wholesale consolidation, recent and future economic conditions,
including turmoil in the financial and credit markets, the
effectiveness of our planned advertising, marketing and promotional
campaigns, our ability to contain costs, disruptions in the supply
chain, including, but not limited to these caused by port
disruptions, disruptions due to weather patterns, our future
capital needs and our ability to obtain financing, our ability to
protect our trademarks, our ability to integrate acquired
businesses, trademarks, trade names and licenses, our ability to
predict consumer preferences and changes in fashion trends and
consumer acceptance of both new designs and newly introduced
products, the termination or non-renewal of any material license
agreements to which we are a party, changes in the costs of raw
materials, labor and advertising, our ability to carry out growth
strategies including expansion in international and
direct-to-consumer retail markets; the effectiveness of our plans,
strategies, objectives, expectations and intentions which are
subject to change at any time at our discretion, potential cyber
risk and technology failures which could disrupt operations or
result in a data breach, the level of consumer spending for apparel
and other merchandise, our ability to compete, exposure to foreign
currency risk and interest rate risk, the impact to our business
resulting from the United Kingdom’s referendum vote to exit the
European Union and the uncertainty surrounding the terms and
conditions of such a withdrawal, as well as the related impact to
global stock markets and currency exchange rates; possible
disruption in commercial activities due to terrorist activity and
armed conflict, actions of activist investors and the cost and
disruption of responding to those actions, and other factors set
forth in Perry Ellis’ filings with the Securities and Exchange
Commission. Forward-looking statements also may include information
concerning the proposed merger transaction, including unexpected
costs or liabilities, delays due to regulatory review, certain
closing conditions (including the committed financing) may not be
timely satisfied or waived, litigation may be commenced and general
and business conditions may change. Investors are cautioned
that all forward-looking statements involve risks and uncertainties
and factors relating to the proposed transaction, including those
risks and uncertainties detailed in Perry Ellis’ filings with the
SEC, all of which are difficult to predict and many of which are
beyond Perry Ellis’ control. You are cautioned not to place undue
reliance on these forward-looking statements, which are valid only
as of the date they were made. We undertake no obligation to update
or revise any forward-looking statements to reflect new information
or the occurrence of unanticipated events or otherwise.
Additional Information and Certain Information Regarding
Participants
The Company, its directors and certain of its executive officers
may be deemed to be participants in the solicitation of proxies
from Company stockholders in connection with the proposed
transaction. The Company intends to file a proxy statement and
WHITE proxy card with the U.S. Securities and Exchange Commission
(the “SEC”) in connection with any such solicitation of proxies
from Company stockholders. COMPANY STOCKHOLDERS ARE STRONGLY
ENCOURAGED TO READ ANY SUCH PROXY STATEMENT AND ACCOMPANYING WHITE
PROXY CARD WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN
IMPORTANT INFORMATION. Information regarding the ownership of the
Company’s directors and executive officers in Company stock,
restricted stock and options is included in their SEC filings on
Forms 3, 4, and 5, which can be found through the Company’s website
(http://investor.pery.com), or through the SEC’s website at
www.sec.gov. Information can also be found in the Company’s other
SEC filings, including the Company’s Annual Report on Form 10-K for
the year ended February 3, 2018 and the Form 10-K/A filed by the
Company with the SEC on June 1, 2018. More detailed and updated
information regarding the identity of potential participants, and
their direct or indirect interests, by security holdings or
otherwise, will be set forth in the proxy statement and other
materials to be filed with the SEC in connection with the proposed
transaction. Stockholders will be able to obtain any proxy
statement, any amendments or supplements to the proxy statement and
other documents filed by the Company with the SEC for no charge at
the SEC’s website at www.sec.gov. Copies will also be available at
no charge at the Company’s website at http://investor.pery.com, by
writing to Perry Ellis International, Inc., at 3000 N.W. 107
Avenue, Miami, FL 33172.
Certain Participant Information
In accordance with Rule 14a-12(a)(1)(i) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), the
following directors, executive officers and other employees of
Perry Ellis are deemed to be participants in the solicitation of
proxies from Perry Ellis’ shareholders in connection with the
proposed transaction and, as of the date hereof, beneficially own
the amount of shares of Perry Ellis’ common stock, $0.01 par value
per share, indicated adjacent to his or her name: (i) Perry Ellis
directors: Joe Arriola (15,590 shares), Jane E. DeFlorio (22,710
shares), George Feldenkreis (1,716,862 shares), Oscar Feldenkreis
(1,223,329 shares), Bruce J. Klatsky (21,723 shares), Michael W.
Rayden (21,723 shares), and J. David Scheiner (26,205 shares), and
(ii) Perry Ellis executive officers and other employees: David
Enright (31,706 shares), Jorge Narino (14,988 shares), Stanley
Silverstein (73,666 shares) and John Voith (64,624 shares). The
business address for each person is c/o Perry Ellis International,
Inc., 3000 N.W. 107th Avenue, Miami, FL 33172. More detailed and
updated information regarding the identity of potential
participants, and their direct or indirect interests, by security
holdings or otherwise, will be set forth in the proxy statement,
including the schedules and appendices thereto, and other materials
to be filed with the SEC in connection with the proposed
transaction.
Contacts
Investor: Innisfree M&A Incorporated Arthur
Crozier / Jennifer Shotwell / Scott Winter 212-750-5833
or
Media: Joele Frank, Wilkinson Brimmer Katcher
Ed Trissel / Sharon Stern / Jeff Kauth 212-355-4449
Perry Ellis International Inc. (delisted) (NASDAQ:PERY)
Historical Stock Chart
From Jun 2024 to Jul 2024
Perry Ellis International Inc. (delisted) (NASDAQ:PERY)
Historical Stock Chart
From Jul 2023 to Jul 2024