Ascena to Buy Owner of Ann Taylor and Loft Stores

Company Getting Mall-based Fashion Brands, to Pair with Lane Bryant, Justice, Outfit Barn and Cacique Retail Clothing Stores it Owns

The yearly Las Vegas event of retail homeowner and merchants at this year’s Reconnaissance conference began with a bang today with the news that Ascena Retail Group will buy the owner of Ann Taylor and Loft in a cash-and-stock offer valued at about $2.16 billion.

New Jersey-based Ascena plans to include Ann Taylor to its line of fashion-based apparel stores, which includes Lane Bryant, Justice, Dress Barn and Cacique. All informed, Ascena possesses about 3,900 stores in the U.S. and Canada.

Ann Inc. the dad and mom business of Ann Taylor and Loft, operated 1,030 Ann Taylor, Ann Taylor Factory, Loft, Loft Outlet and Lou & & Grey shops in the U.S. and Canada at the beginning of this year. The seller shocked experts by publishing a strong fourth-quarter revenue in March after revealing plans to expand its new casual brand, Lou & & Grey, by opening more shops this year and launching a major e-commerce presence.

Under regards to the arrangement, Ann shareholders will certainly get $37.34 in cash and 0.68 of a share of Ascena Retail Group stock in exchange for each share they have. The companies implied a price per share of $47.00 based on the closing cost of Ascena stock on May 15, 2015. The deal provides the owner of Ann Taylor shops an enterprise value of roughly $2 billion.

Ascena stated it has actually recognized $150 million in annualized expense savings it anticipates to produce from the combination over a three-year period. The majority of the expense savings would come from item sourcing and procurement, distribution, logistics and other performances.

Ascena, which intends to load up on bank financial obligation to finance the acquisition, stated it anticipates the mix to create substantial cash flow to maintain “suitable levels of capital expenses and making it possible for quick deleveraging.”

The buyout, which has been unanimously authorized by the boards of both companies, is expected to close later this year.

“This powerful deal signs up with 2 strong and highly complementary companies and management groups and dramatically enhances our leadership position in females’s specialty clothing selling,” stated David Jaffe, Ascena’s president and CEO in a statement announcing the agreement. “With the addition of the Ann Taylor and Loft brands, Ascena will become one of North America’s largest and most diversified specialty clothing merchants, with a tremendous set of opportunities to continue to broaden its management position in the women’s garments market.”

Kay Krill, Ann Inc.’s president and CEO, stated she was confident that integrating with Ascena is the best next step for the fashion apparel chain.

“The deal will make us part of a larger company with a diversified portfolio of brands focused on the ladies’s garments market, a strong operating platform and an effective financial base,” said Krill.

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