Jos. A. Bank may acquire Eddie Bauer

Jos. A. Bank Clothiers and Golden Gate Capital have announced that Jos. A. Bank has entered into a

definitive agreement with Everest Topco LLC, a portfolio company of Golden Gate, under which Jos. A. Bank will acquire Everest Holdings LLC, parent company of the Eddie Bauer brand. It also announced that it will promptly commence an issuer tender offer to acquire up to 4.6 million of its common shares, or 16.4 percent of its outstanding shares, at a price of 65 dollars per share, or an aggregate of up to 300 million dollars.

The purchase price for Eddie Bauer consists of a combination of 564 million dollars in cash and approximately 4.7 million new shares of common stock of Jos. A. Bank, issued to Everest Topco at 56 dollars per share, a premium to the pre-announcement share price. Everest Topco will also have the right to earn up to an additional 50 million dollars in cash based on Eddie Bauer's EBITDA for fiscal 2014.

Under the terms of the Agreement, Jos. A. Bank will have the right to terminate its agreement to acquire Eddie Bauer in the event an unsolicited offer is made to acquire Jos. A. Bank that the company's Board determines would reasonably be expected to create greater value for Jos. A. Bank's shareholders than the Eddie Bauer transaction and issuer tender offer.

Following the closing of the Eddie Bauer acquisition and issuer tender offer, Everest Topco will own approximately 16.6 percent of the company's outstanding shares and will have the right to designate two directors on the company's Board of Directors.

Founded in 1920, Eddie Bauer also has a significant global presence. For the year ended December 31, 2013, Eddie Bauer has estimated its revenue to be between 885 million dollars and 895 million dollars and adjusted EBITDA to be between 61 million dollars and 65 million dollars.

The Eddie Bauer acquisition will significantly accelerate Jos. A. Bank's growth and will be immediately accretive. In 2014, the combined company is expected to generate in excess of 2.1 billion dollars in revenue, 255-265 million dollars of adjusted EBITDA and 3.20 dollars-3.40 dollars of adjusted EPS. In 2015, revenue is expected to be in excess of 2.2 billion dollars, with adjusted EBITDA in the range of 325-340 million dollars and 4.65 dollars-4.90 dollars of adjusted EPS, including the impact of 25 million dollars of synergies mentioned above.

“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. Based on the success of Eddie Bauer's turnaround and the outstanding opportunities a combination of our companies provides, we believe this transaction ideally positions Jos. A. Bank for the future, and Golden Gate's investment in our company and participation on our Board is a strong endorsement of our plan,” opined Robert N. Wildrick, Chairman of Jos. A. Bank.