By Lisa Kerner
Charlotte, N.C., Feb. 11 - Affiliates of Sun Capital Securities Group, LLC entered into a merger agreement with Kellwood Co.
The agreement is conditioned upon the successful completion of Sun Capital's pending $21-cash-per-share tender offer for the company.
Once the tender offer is complete, Sun Capital will assume control of Kellwood's board of directors.
Kellwood's board is recommending that its stockholders tender their shares into the offer.
Shareholders who do not tender their shares in the offer will not receive payment until the merger has been completed, a process that could take several months.
Kellwood is also terminating its cash tender offer for up to $60 million total principal amount of its 7 7/8% senior notes due 2009 to allow Sun Capital's tender offer to end as scheduled on Feb. 12.
"We look forward to working collaboratively with Kellwood to ensure a smooth and expeditious transition and urge all shareholders to tender their shares to guarantee they receive prompt payment for their holdings," Sun Capital vice president Jason Bernzweig said in a company news release.
"As we have said before, we are prepared to commit substantial resources beyond the purchase price to build Kellwood's business, and we will work closely with management and employees at Kellwood to strengthen the company and develop its branded portfolio," Bernzweig said.
"As a strong, private company, Kellwood will continue to execute on its strategic priorities to position the company as a brand-focused marketing enterprise," Kellwood chairman, president and chief executive officer Robert C. Skinner Jr. added in a Kellwood statement released on Monday.
Sun Capital Securities Group is being advised by Citi and Credit Suisse Securities (USA) LLC. Kellwood was advised by Banc of America Securities LLC and Morgan Stanley & Co. Inc.
It was previously reported that Sun Capital, in an open letter to fellow Kellwood shareholders, urged them to tender their shares in the offer, valued at some $762 million, including debt.
Cardinal Integrated, LLC, a Sun Capital affiliate, began its unsolicited tender offer for all of the outstanding shares of Kellwood on Jan. 15.
Sun Capital has a 9.9% ownership interest in the St. Louis-based apparel and consumer soft goods marketer.
| Acquirer: | Sun Capital Securities Group, LLC
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| Target: | Kellwood Co.
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| Announcement date: | Feb. 11
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| Transaction total: | $762 million
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| Price per share: | $21.00
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| Expected closing: | Feb. 12 (tender offer)
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| Stock price of target: | NYSE: KWD: $20.53 on Feb. 8
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