Sycamore Partners finally sealed the deal to acquire The Jones Group Inc. for $2.2 billion.
After months of tense negotiations, Sycamore has struck a $15-a-share cash deal for the company, plus net debt, in a transaction expected to close in the second quarter of 2014.
Jones put itself on the auction block over the summer amid pressure from activist hedge fund manager Barington Capital Group LP to pare down its non-core fashion brands and focus on shoes.
"This transaction is a result of diligent analysis and thoughtful strategic deliberations over many months with the assistance of our advisers. This all-cash transaction delivers immediate and compelling value to our shareholders," Jones CEO Wes Card said in a statement.
Sidney Kimmel, Jones' founder and chairman, said in a statement, "We are pleased to have reached this agreement, which we believe is a positive development for all of our stakeholders. This business, which I founded nearly 45 years ago, has expanded into a global portfolio of powerful brands.”
Sycamore Partners Managing Director Stefan Kaluzny was also upbeat. "We look forward to a successful partnership with the company's talented associates as we continue to serve The Jones Group's many loyal customers," he said.
Stuart Weitzman, Kurt Geiger and Nine West are among the shoe brands in Jones’ portfolio that are thought to be coveted by Sycamore, and sources said the private equity group is keen to divest some of Jones’ underperforming brands.
Private equity firm KKR & Co. LP dropped out of a joint bid with Sycamore in September. G-III, which also exited the race for Jones in November, is reported to have been interested in Jones’ apparel labels, in particular its denim business.
The Jones-Sycamore union was well-received by the industry. Gilbert Harrison, chairman and founder of Financo, said the deal was positive for Jones. “It’s been a long and difficult process, and Sycamore will be an excellent choice to help revitalize the company back to its previous height," he said.
Harrison also lauded Kimmel for forging Jones’ footprint in the industry. “What Sidney has done in building the company was nothing short of spectacular as an industry executive," he said.
Contrary to speculation, Harrison said he expects Sycamore will retain Jones’ apparel brands. “I would be surprised if they divest because they own a number of apparel companies. They have more expertise in apparel than footwear,” he said.