Combined company with trailing-twelve month sales of $7.4 billion
now the largest US-based specialty apparel retailer focused
exclusively on the female consumer
Trailing-twelve month combined adjusted EBITDA of $661 million
before expected synergies, with significant free cash flow
$150 million in annual run rate synergies identified, expected by
end of the third year post-closing
MAHWAH, N.J.--(BUSINESS WIRE)--Aug. 21, 2015--
ascena retail group, inc. (NASDAQ:ASNA) today announced that it has
completed its acquisition of ANN INC. for a combination of cash and
ascena stock in an accretive transaction.
With the completion of the merger, ANN INC. shares will be delisted from
the NYSE and trading will cease at the close of business on Friday,
August 21st. ANN INC. will continue to operate as a
wholly-owned subsidiary of ascena.
With the addition of the Ann Taylor, LOFT, and Lou & Grey brands, ascena
is now one of North America’s largest and most diversified specialty
apparel retailers, with $7.4 billion in trailing twelve month sales, a
combined fleet of over 4,900 stores, and over 70,000 associates.
David Jaffe, ascena’s President and Chief Executive Officer, commented:
“This powerful merger joins two strong and highly complementary
organizations, and dramatically reinforces our leadership position in
women’s specialty apparel retailing. The acquisition positions ascena as
the third largest specialty apparel retailer and the single largest
focused on women’s apparel, with a diverse brand portfolio that serves
women of all ages, sizes and demographics.”
Jaffe concluded, “We expect to leverage ascena’s state-of-the-art
distribution and fulfillment centers and its shared services
capabilities to rapidly and comprehensively integrate the ANN INC.
brands, and drive significant value to our stockholders. We have
identified $150 million in annualized run rate synergies resulting from
this transaction that we expect to capture by the end of the third year
Kay Krill, President and Chief Executive Officer of ANN INC., added, “As
we embark on this next chapter in ANN INC.’s history, I am very excited
about the opportunities ahead for our brands and our business. Combined
with ascena, we have a stronger competitive position and financial base
as part of the nation’s largest specialty retailer focused exclusively
on women’s apparel. In taking this next step, our focus on our clients
remains unchanged. We look forward to continuing to be her go-to
wardrobing destination by delivering the same great fashion, the same
high level of quality and service, and the seamless shopping experience
that are hallmarks of shopping with our brands.”
Excluding transaction and integration expenses, the acquisition is
expected to be accretive to EPS within the first year post-closing,
accelerating to greater than 20% accretion to EPS thereafter.
Additionally, ascena expects the combination to generate significant
cash flow, which will enable rapid de-leveraging while supporting
planned levels of capital expenditures.
Under the terms of the transaction, 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. The transaction gives ANN INC. an enterprise
value of approximately $2.0 billion.
ascena financed the cash portion of the acquisition through a $1.8
billion senior secured term loan it placed on July 29, 2015.
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 INC. in connection with its
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.
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 Ann
Taylor, LOFT, Lou & Grey, 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 4,900 stores throughout the United States, Canada and
Puerto Rico. For more information about ascena retail group, visit
ascenaretail.com, AnnTaylor.com, LOFT.com, louandgrey.com,
lanebryant.com, cacique.com, maurices.com, dressbarn.com,
catherines.com, and shopjustice.com.
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 and integration of ascena and ANN — 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, 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 consummation of the transaction on relationships,
including with employees, 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.
Non-GAAP Financial Results
The financial information included herein has been adjusted to exclude
certain one-time items such as acquisition-related, integration and
restructuring expenses, asset impairment charges and accelerated
depreciation of fixed assets. The Company believes that all such
expenses are not indicative of our underlying operating performance. In
addition, this release makes reference to the financial performance
measure of earnings before interest, taxes, depreciation and
amortization, as adjusted for the previously mentioned items. ascena
considers adjusted EBITDA to be useful to investors because it believes
that it is an important indicator of ascena’s operational strength.
Reference is made to ascena’s Current Report on Form 8-K filed on July
10, 2015, Quarterly Report on Form 10-Q for the fiscal quarter ended
April 25, 2015 and its Annual Report on Form 10-K for the fiscal year
ended July 26, 2014 for a full discussion on the use of adjusted EBITDA
and a reconciliation of adjusted, non-GAAP financial measures to the
most directly comparable GAAP financial measure.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150821005478/en/
Source: ascena retail group, inc.
James Palczynski, 203-682-8229