This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bain to Buy Burlington Coat Factory

Private equity buyers continued to show an affinity for retailers, as Burlington Coat Factory (BCF) announced Wednesday an agreement to be sold to Bain Capital for $2.06 billion, or $45.50 a share, in cash.

While the deal is still subject to approval from shareholders, Bain has received commitments from the Milsteins, Burlington Coat's founding family that owns 62% of the company, to vote for the sale.

"We are thrilled that a transaction with Bain Capital delivers significant value to our stockholders," said Monroe Milstein, the company's chairman and chief executive, in a statement. "We are very proud of what the company has accomplished over the past 30 years."

Shares of Burlington Coat Factory have jumped 11% in January as word traveled that buyout talks for the company were under way. The shares were halted for trading Wednesday morning at $44.58.

Founded in 1972 by the Milstein family, Burlington Coat Factory expanded from a single store selling coats to a chain of 367 department stores in 42 states.

Flush with cash, the private equity industry has shown an appetite lately for taking retailers private in leveraged buyouts. The rise of discount chains such as Wal-Mart (WMT - Get Report) has left the business models of many companies looking outdated, but financial buyers aim to unlock hidden value on their balance sheets by selling off real estate and other assets. Last year, companies including Toys R Us and Neiman Marcus were scooped up, and investors on Wall Street are expecting a more deals to come in 2006.

Goldman Sachs (GS) acted as financial adviser to the company and rendered a fairness opinion on the deal. Hughes Hubbard & Reed LLP acted as legal counsel. Kirkland & Ellis LLP provided legal counsel to Bain Capital.

Burlington Coat Factory said it will filed a proxy statement with the Securities and Exchange Commission containing more information about the deal.

"Burlington Coat Factory is a well-managed retail business with a strong consumer following, high-quality product offerings and good growth prospects," said Jordan Hitch, a managing director with Bain, in a statement. "We are delighted to have the opportunity to partner with the experienced management team to build on the company's track record of success in merchandising and store operations and to continue to grow the store portfolio."

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
BCF $7.76 0.00%
WMT $79.84 0.83%
AAPL $130.28 0.47%
FB $81.53 -1.07%
GOOG $565.06 3.30%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs