True Religion Finds Savior in $835M TowerBrook Buyout
NEW YORK (TheStreet) -- High-end jeans and clothing chain True Religion (TRLG) is being bought by private-equity firm TowerBrook Capital Partners in a $835 million deal that values the company's shares at $32 in cash.
Were TrueReligion shareholders to accept Friday's takeover offer, the company will fall into the hands of a PE firm with experience in the high-end retail industry.
TowerBrook has owned apparel brands such as Jimmy Choo, Odlo, BevMo! And Phase Eight, the fund said in a statement.
"We are excited to combine our retail and apparel expertise with Lynne (Koplin) and the True Religion team to help the company with brand building and international opportunities," Andrew Rolfe, a TowerBrook executive, said in a statement.While TowerBrook expects to be able to grow True Religion internationally, the deal comes amid declining profitability for the company and a competitive retail and apparel marketplace. In October, True Religion hired bankers to seek strategic alternatives or a sale of the company. Weak earnings midway through 2012 pushed True Religion shares lower by 50% at some points in the year, however, Friday's deal means shareholders are getting a proposed payout about 20% above year-ago share prices. True Religion shares gained more than 7% in early Friday trading to $31.58, just below TowerBrook's offer price. "After a thorough review of strategic alternatives to enhance shareholder value, we are pleased to reach this agreement, which provides our shareholders with immediate and substantial cash value representing a significant premium," said Seth Johnson, lead director of True Religion, in a statement." Having considered alternatives over a seven month period, the Special Committee believes TowerBrook's $32.00 per share cash offer for the Company is in the best interest of our shareholders." "TowerBrook's investment is an important endorsement of the True Religion brand, its prospects and the hard work and commitment of our team," Lynne Koplin, TrueReligion's interim chief executive, said in a statement Friday. "At this critical inflection point in our business, global growth and product development effort, TowerBrook's support and experience will be a true differentiator." Friday's offer of $32 a share represents a premium of approximately 52% to True Religion's share price on Oct. 9, 2012, the day before the company announced it had begun to explore strategic alternatives.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV