Jos. A. Bank Clothiers Inc. said Friday it plans to acquire outdoors retailer Eddie Bauer in a deal valued at $825 million, likely ending a nasty takeover fight with rival suit seller The Men's Wearhouse Inc.
The Hampstead, Md.-based men's apparel seller reached an agreement to buy Eddie Bauer parent company Everest Holdings LLC for $564 million cash and $300 million in Jos. A. Bank stock.
Jos. A. Bank also said it would issue a tender offer to buy up to 4.6 million of its outstanding shares, just over 16 percent, at $65 per share, which would depend on closing the deal.
"We have long admired the Eddie Bauer brand and its widespread appeal among those with active lifestyles and excitement about the outdoors, a large and growing customer base that overlaps significantly with ours," said Robert N. Wildrick, Jos. A. Bank's chairman, in a statement Friday.
Reports of the deal had surfaced two weeks ago, but Jos. A. Bank had not confirmed those reports. The marriage of the two brands would likely put an end to a nasty takeover battle in which Jos. A. Bank and rival Men's Wearhouse were trying to acquire each other.
Men's Wearhouse released a statement Friday saying the company was still evaluating its options on the takeover bid.
Jos. A. Bank and Eddie Bauer, which appeal to similar customers, said they are looking for a merger to bring substantial opportunities for growth and about $25 million in infrastructure synergies while maintaining two separate and independently run brands. The deal would give Bank a larger stake in men's apparel while adding women's apparel and footwear.
The merger would bring together "two historic 20th century American apparel brands ... which have been serving different lifestyle aspects of a demographically similar family of customers," said Jos. A. Bank CEO R. Neal Black.
The deal would immediately add to Bank earnings per share, the companies said. Together, the companies would have more than $2.1 billion in sales.Eddie Bauer's owner, private equity firm Golden Gate Capital, would become a major shareholder under the deal. Everest Topco LLC, a company owned by Golden Gate and owner of Everest Holdings, would be issued stock at $56 per share.Jos. A. Bank said the agreement allows it to end the planned deal if an unsolicited offer is made to acquire Bank that would create greater shareholder value.
Eddie Bauer, which has estimated sales for 2012 of between $885 million and $895 million, was one of the first companies that Jos. A. Bank considered acquiring as it began looking for acquisitions about two years ago. Jos. A. Bank first approached Golden Gate in early 2012.