Jos. A. Bank to buy Eddie Bauer for $825 million

Brands to maintain independence. Eddie Bauer 's Michael Egeck remains CEO and pledges to continue outdoor focus.
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Men’s apparel specialist Jos. A. Bank made it official Friday, offering $825 million in cash and stock to buy outdoor brand and retailer Eddie Bauer.

"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,” Jos. A. Bank Chairman Robert Wildrick said in statement.

While the proposed deal will keep the two brands independent — Eddie Bauer CEO Michael Egeck is keeping his job — officials said the brands will “benefit from significant synergies, including approximately $25 million in process and infrastructure savings” by 2015.

The announcement revealed Eddie Bauer’s estimated 2013 annual revenue between $885 million and $895 million, with net income between $7 million and $9 million and adjusted EBITDA between $61 million and $65 million.

Private equity firm Golden Gate Capital will sell Eddie Bauer for combination of $564 million in cash and about 4.7 million shares of Jos. A. Bank stock (Nasdaq: JOSB). It isn’t a done deal, however, and Jos. A. Bank will have the right to terminate the agreement if a better offer comes up to itself be acquired.

Jos. A. Bank recently rejected an acquisition offer by Men’s Wearhouse, and it also made attempts to acquire its rival before switching gears toward Eddie Bauer. While it might seem Eddie Bauer has become a pawn in the game, Jos. A. Bank officials insist that that they’ve had their eye on Eddie Bauer for the past two years, first approaching Golden Gate in 2012.

“The acquisition of Eddie Bauer solidifies Jos. A. Bank's leadership in men's apparel and adds new categories such as women's apparel and footwear, to create a powerful, diversified, multi-branded retail platform,” officials said.

Eddie Bauer will continue to focus on its outdoor customer, Egeck said.

“We are very proud of what we have achieved by refocusing Eddie Bauer on its heritage in serving outdoor enthusiasts and leveraging innovation and product expertise. We feel confident that our growth and success will continue as part of Jos. A. Bank.”

Eddie Bauer, which has 370 stores throughout the United States, Canada and Japan, was scooped up out of bankruptcy by Golden Gate in 2009. Since then, it has focused on returning to its outdoor roots, first under the leadership of Neil Fiske, and despite his departure in early 2012, continuing with the hires of former The North Face executives, including Egeck and Dan Templin as CFO.

Jos. A. Bank Clothiers, Inc., designs, manufactures and retails men's tailored and casual clothing, sportswear, footwear and accessories. The company has 629 stores in 44 states and the District of Columbia.

--David Clucas

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