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Jos. A Bank to Buy Eddie Bauer for $825M

Stocks in this article: JOSB MW

Updated from 7:53 a.m EST with latest premarket share price and additional information on the deal.

NEW YORK (TheStreet) -- Following months of rumors that a deal was imminent, Jos. A Bank (JOSB) has announced an $825 million deal to buy Eddie Bauer, citing its long-standing interest in the retailer.

The Hampstead, Md.-based firm made the deal with Everest Topco to buy Everest Holdings, Eddie Bauer's parent company.

"Jos. A. Bank has been engaged in an intensive process over the last two years to identify and review high potential acquisition candidates that would enable the Company to leverage its core competencies and deliver immediate and long-term value to its shareholders," Jos. A Bank said, in a statement. "Eddie Bauer was one of the first acquisition candidates considered by Jos. A. Bank."

"[The] combination creates substantial opportunities for growth and synergies while allowing two iconic American brands to share core competencies and demographically similar customer sase," said Jos. A. Bank.

The purchase price combines $564 million in cash and approximately 4.7 million new shares of Jos. A Bank's common stock. In 2014, the combined company is expected to generate in excess of $2.1 billion in revenue, $255 million to 265 million of adjusted EBITDA and $3.20 to $3.40 of adjusted EPS, according to Jos. A Bank.

Shares of Jos. A Bank, which has been locked in a takeover battle with Men's Wearhouse (MW), fell 4.59% to $52.40 before market open.

Everest Topco is a portfolio company of private equity firm Golden Gate Capital. Under the terms of the deal, Golden Gate will become a significant shareholder in Jos. A Bank.

"The Company contacted Golden Gate on several occasions to discuss a possible acquisition of Eddie Bauer, first in early 2012, a number of times thereafter and again several months before making its offer for Men's Wearhouse in September 2013," said Jos. A. Bank, in its statement. "Until recently, Golden Gate was not prepared to consider a transaction involving Eddie Bauer. However, given Eddie Bauer's accelerated momentum and the strategic merits of this transaction, the Company was able to reach an agreement with Golden Gate and is very pleased to be announcing this acquisition today."

Men's Wearhouse shares slipped 8.64% to $42.50 before market open.

-- Written by James Rogers in New York

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