FREMONT, Calif. and
HAMPSTEAD, Md., March 11, 2014 /PRNewswire/ -- The Men's
Wearhouse (NYSE: MW) and Jos. A. Bank Clothiers (Nasdaq: JOSB)
today announced that they have entered into a definitive agreement
under which Men's Wearhouse will acquire all of the outstanding
shares of common stock of Jos. A. Bank for $65.00 per share in cash, or total consideration
of $1.8 billion. The boards of
directors of both companies have unanimously approved the
transaction.
Together, Men's Wearhouse and Jos. A. Bank will have more than
1,700 stores in the U.S., with approximately 23,000 employees and
sales of $3.5 billion on a pro forma
basis.
"We are pleased to have reached this agreement with Jos. A.
Bank, which we believe will deliver substantial benefits to our
respective shareholders, employees and customers," said
Doug Ewert, President and Chief
Executive Officer of Men's Wearhouse. "Together, Men's
Wearhouse and Jos. A. Bank will have increased scale and breadth,
and Jos. A. Bank's strong brand and complementary business model
will broaden our customer reach. We expect the transaction
will be accretive to Men's Wearhouse's earnings in the first full
year."
Mr. Ewert continued, "The combined company will have the
operational flexibility to successfully execute on strategic plans
at both brands. We are excited by the opportunities this
transaction presents and are confident that our combined
best-in-class offerings for our valued customers will drive
significant shareholder value. All of us at Men's Wearhouse
have great respect for the Jos. A. Bank management team and are
eager to work with Jos. A. Bank's talented employees. I am
confident that, together, we will create a truly great company for
all of our stakeholders."
Robert N. Wildrick, Chairman of
the Board of Jos. A. Bank, said, "Our Board has been rigorously
focused on pursuing a path for our shareholders that maximizes
value creation. We have been committed to pursuing a range of
strategic alternatives to achieve that goal. The transaction we are
announcing today clearly reflects the success of our efforts,
providing a substantial premium over any price at which our stock
has ever traded, including a 56% premium since our interest in
Men's Wearhouse became public last October, and allowing our
shareholders to receive immediate consideration for their
holdings. On behalf of our Board and management team, I would
like to express our deep appreciation to our employees for their
hard work in making Jos. A. Bank the great company it is
today. We look forward to working together with Men's
Wearhouse to ensure a smooth transition."
Strategic and Financial Benefits of the Combination
- Provides compelling value for both companies'
shareholders: The combination provides Jos. A. Bank's
shareholders immediate liquidity and substantial value for their
investment. The transaction represents a 65% premium over
Jos. A. Bank's unaffected enterprise value and a 56% premium over
Jos. A. Bank's closing share price on October 8, 2013, the day prior to the public
announcement of Jos. A. Bank's proposal to acquire Men's
Wearhouse. Further, the transaction represents a 10x
enterprise value to last twelve months ("LTM") Adjusted
EBITDA[1] multiple (assuming an estimated $137 million of Adjusted EBITDA for Jos. A.
Bank's fiscal 2013 ending February 1,
2014).[2]
Men's Wearhouse shareholders will benefit from approximately
$100 to $150 million of run-rate
annual synergies realized over three years, through improving
purchasing efficiencies, optimizing customer service and marketing
practices, and streamlining duplicative corporate functions.
Additionally, Men's Wearhouse's vertical direct sourcing
model will be leveraged to improve combined merchandising and
sourcing across the combined company and rationalize inventory over
time.
- Combined company positioned to succeed: The
combined company will be the fourth largest U.S. men's apparel
retailer with pro forma sales of approximately $3.5 billion. This transaction brings
together a high-value collection of national and owned brands.
Building on the two companies' complementary business models,
the combined company will better serve an expanded customer base in
more locations and optimize merchandising and sourcing
capabilities.
- Smooth transition expected: Men's Wearhouse and Jos. A.
Bank expect a smooth integration, as there will be no rebranding or
remodels required – Jos. A. Bank's store banner will remain in
place. In addition, the Men's Wearhouse management team has a
proven track record of successful acquisitions, having integrated
approximately 600 stores and over 7,000 employees in connection
with its previous acquisitions of Joseph
Abboud, After Hours and Moores. Men's Wearhouse
expects to implement the best practices of both companies to drive
further operational and financial success. Management will consist
of the most qualified individuals from both organizations.
Terms of the Transaction
Men's Wearhouse will acquire Jos. A. Bank for approximately
$1.8 billion in cash. Today,
Men's Wearhouse announced that it has extended the expiration date
of its tender offer to 5:00 p.m.,
New York City time, on
Wednesday, March 19, 2014, unless
extended. Men's Wearhouse will amend its pending tender offer
prior to that expiration date in accordance with, and to reflect,
the terms of the Merger Agreement, including to reflect the
increase in the purchase price to be offered to $65.00 per share and other changes contemplated
by the Merger Agreement between Men's Wearhouse and Jos. A.
Bank.
Jos. A. Bank's Board of Directors unanimously determined that
the definitive merger agreement with Men's Wearhouse and the terms
of the Men's Wearhouse tender offer are fair to and in the best
interests of Jos. A. Bank and its shareholders, and recommends that
Jos. A. Bank shareholders tender their Jos. A. Bank shares to Men's
Wearhouse. Jos. A. Bank will amend its Schedule 14D-9 previously
filed with the Securities and Exchange Commission to reflect the
recommendation of its Board of Directors. The transaction is
subject to certain closing conditions, including the valid tender
of sufficient shares, which, when added to shares owned by Men's
Wearhouse and its affiliates, constitute a majority of the total
number of common shares outstanding on a fully-diluted basis. Any
shares not tendered in the offer will be acquired in a second step
merger at the same cash price as in the tender offer.
In conjunction with this transaction, Jos. A. Bank has
terminated its agreement to acquire Everest Holdings LLC, the
parent company of Eddie Bauer. As a result of the termination
of its agreement to purchase Everest Holdings LLC, the terms and
conditions of the offer were not satisfied. Effective immediately,
Jos. A. Bank is also withdrawing its previously announced tender
offer to purchase for cash up to $300
million in value of its common stock.
Financing and Approvals
The Men's Wearhouse tender offer is not conditioned on
financing, and the Company expects to finance the transaction with
a combination of balance sheet cash and committed debt financing
from BofA Merrill Lynch and JPMorgan Chase Bank, N.A. The
strong free cash flow generated by the combined company is expected
to enable rapid deleveraging.
The transaction, which is expected to close by the third quarter
of 2014, is subject to satisfaction of customary closing
conditions, including expiration or termination of the applicable
waiting period under the Hart-Scott-Rodino Antitrust Act.
Both Men's Wearhouse and Jos. A. Bank are working cooperatively
with the Federal Trade Commission to obtain approval of the
transaction as soon as possible.
Advisors
BofA Merrill Lynch and J.P. Morgan Securities LLC are serving as
financial advisors to Men's Wearhouse, and Willkie Farr & Gallagher LLP is serving as
legal advisor.
Goldman, Sachs & Co. and Financo, LLC are serving as
financial advisors to Jos. A. Bank, and Skadden, Arps, Slate,
Meagher & Flom LLP and Guilfoil Petzall & Shoemake, L.L.C.
are serving as its legal advisors.
About Men's Wearhouse
Founded in 1973, Men's Wearhouse is one of North America's largest specialty retailers of
men's apparel with 1,124 stores. The Men's Wearhouse, Moores
and K&G stores carry a full selection of suits, sport coats,
furnishings and accessories in exclusive and non-exclusive
merchandise brands and Men's Wearhouse and Tux stores carry a
limited selection. Most K&G stores carry a full selection
of women's apparel. Tuxedo rentals are available in the Men's
Wearhouse, Moores and Men's Wearhouse and Tux stores.
Additionally, Men's Wearhouse operates a global corporate apparel
and workwear group consisting of Twin Hill in the United States and Dimensions, Alexandra
and Yaffy in the United Kingdom. Investors can find
additional information at http://ir.menswearhouse.com/.
About Jos. A. Bank
Jos. A. Bank Clothiers, Inc., established in 1905, is one of the
nation's leading designers, manufacturers and retailers of men's
classically-styled tailored and casual clothing, sportswear,
footwear and accessories. The Company sells its full product line
through 629 stores in 44 states and the District of Columbia, a nationwide catalog and
an e-commerce website that can be accessed at
http://www.josbank.com/. The Company is headquartered in
Hampstead, Md., and its common
stock is listed on the NASDAQ under the symbol "JOSB."
ADDITIONAL INFORMATION
On January 6, 2014, Java Corp.
("Purchaser"), a wholly owned subsidiary of The Men's Wearhouse,
Inc., commenced a cash tender offer for all outstanding shares of
common stock of Jos. A. Bank Clothiers, Inc. not already owned by
Men's Wearhouse or any of its subsidiaries, subject to the terms
and conditions set forth in the Amended and Restated Offer to
Purchase dated as of February 24,
2014 (the "Offer to Purchase"). Today, Men's Wearhouse
announced that it has extended the expiration date to the tender
offer to 5:00 p.m.,
New York City time, on
March 19, 2014, unless further
extended in the manner set forth in the Offer to Purchase.
Men's Wearhouse will amend its pending tender offer prior to that
expiration date in accordance with, and to reflect, the terms of
the Merger Agreement, including to reflect the increase in the
purchase price to be offered to $65.00 per share and other changes contemplated
by the Merger Agreement between Men's Wearhouse, Java Corp. and
Jos. A. Bank.
This communication does not constitute an offer to buy or
solicitation of an offer to sell any securities. This communication
is for informational purposes only. The tender offer is not
being made to, nor will tenders be accepted from, or on behalf of,
holders of shares in any jurisdiction in which the making of the
tender offer or the acceptance thereof would not comply with the
laws of that jurisdiction. The tender offer is being made
pursuant to a tender offer statement on Schedule TO (including the
Offer to Purchase, a related letter of transmittal and other offer
materials) filed by Men's Wearhouse and the Purchaser with the U.S.
Securities and Exchange Commission ("SEC") on January 6, 2014, as amended from time to time.
INVESTORS AND SECURITY HOLDERS OF JOS. A. BANK ARE URGED TO READ
THESE AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR
ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE
TENDER OFFER. Investors and security holders can obtain free copies
of these documents and other documents filed with the SEC by Men's
Wearhouse through the web site maintained by the SEC at
http://www.sec.gov. The Offer to Purchase Letter of
Transmittal and other offering documents may also be obtained for
free by contacting the Information Agent for the tender offer,
MacKenzie Partners, Inc., at 212-929-5500 or toll-free at
800-322-2885.
In response to the amended tender offer by The Men's Wearhouse,
Inc., through its wholly owned subsidiary, Java Corp., Jos. A. Bank
will file an amendment to its solicitation/recommendation statement
on Schedule 14D-9 with the SEC. Any solicitation/recommendation
statement filed by Jos. A. Bank that is required to be mailed
to stockholders will be mailed to stockholders of Jos. A. Bank.
INVESTORS AND STOCKHOLDERS OF JOS. A. BANK ARE URGED TO READ THE
SOLICITATION / RECOMMENDATION STATEMENT AND OTHER DOCUMENTS FILED
WITH THE SEC CAREFULLY IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. Investors and stockholders may obtain free
copies of the solicitation/recommendation statement and other
documents (when available) filed with the SEC by Jos. A. Bank free
of charge through the website maintained by the SEC at www.sec.gov.
In addition, the solicitation/recommendation statement and other
materials related to Men's Wearhouse's proposal may be obtained
from Jos. A. Bank free of charge by directing a request to the
Company's Investor Relations Department, Jos. A. Bank Clothiers,
Inc., 500 Hanover Pike, Hampstead,MD 21074, 410.239.5900
NON-GAAP MEASUREMENTS
This press release includes non-GAAP financial measures. Jos. A.
Bank and Men's Wearhouse are presenting EBITDA with respect to Jos.
A. Bank which is a non-GAAP financial measure. Jos. A. Bank and
Men's Wearhouse believe presentation of this non-GAAP financial
measure is (i) helpful to management in evaluating the proposed
transaction and (ii) useful to investors in connection with their
financial analysis. Non-GAAP financial measures should be viewed in
addition to, and not as an alternative for, results prepared in
accordance with GAAP. For a description of how Jos. A. Bank and
Men's Wearhouse reconcile these non-GAAP financial measures to net
income, please see the appendix to this press release.
FORWARD-LOOKING STATEMENT AND OTHER IMPORTANT
INFORMATION
Jos. A. Bank and Men's Wearhouse obtained or created certain
information used in this press release from research, surveys or
studies conducted by third parties, information provided by
customers, and industry or general publications. Industry
publications and surveys generally state that they have obtained
information from sources believed to be reliable but do not
guarantee the accuracy and completeness of such information. We
have not independently verified the information and data in such
research, surveys, studies, information and publications, and we do
not make any representation as to the accuracy of such information.
This press release contains forward-looking statements and
information about our current and future prospects and our
operations and financial results, which are based on currently
available information. The forward-looking statements include
assumptions about our operations, such as cost control, market
conditions, liquidity and financial condition.
These forward-looking statements are based upon management's
current beliefs or expectations and are inherently subject to
significant business, economic and competitive uncertainties and
contingencies and third-party approvals, many of which are beyond
our control. The following factors, among others, could cause
actual results to differ materially from those expressed or implied
in the forward-looking statements: (1) the occurrence of
any event, change or other circumstances that could give rise to
the termination of the Agreement and Plan of Merger by and among
Men's Wearhouse, Inc., Java Corp. and Jos. A. Bank Clothiers,
Inc., (2) the failure to consummate the acquisition of Jos. A. Bank
for reasons including that the conditions to Men's Wearhouse's
offer to purchase all outstanding shares of Jos. A. Bank's common
stock, including the condition that a minimum number of shares be
tendered and not withdrawn, are not satisfied or waived by Men's
Wearhouse, (3) the possibility that the expected benefits from the
proposed transaction will not be realized within the anticipated
time period, (4) the risk that regulatory or other approvals
required for the transaction are not obtained, (5) the risks
related to the costs and difficulties related to the integration of
Jos. A. Bank's business and operations with Men's Wearhouse's
business and operations, (6) the inability to obtain, or delays in
obtaining, cost savings and synergies from the transaction, (7)
unexpected costs, charges or expenses resulting from the
transaction, (8) litigation relating to the transaction, (9) the
inability to retain key personnel and (10) the possible disruption
that may be caused by the transaction to the business and
operations of Men's Wearhouse and its relationships with customers,
employees and other third parties.
The forward-looking statements in this press release speak only
as of the date hereof. Except for the ongoing obligations of Men's
Wearhouse and Jos. A. Bank to disclose material information under
the federal securities laws, neither Men's Wearhouse nor Jos. A.
Bank undertakes any obligation to revise or update publicly any
forward-looking statement, whether as a result of new information,
the occurrence of certain events or otherwise, except as required
by law. Other factors that may impact the forward-looking
statements can be found in Men's Wearhouse's and Jos. A. Bank's
respective filings with the SEC. Please read the "Risk
Factors" and other cautionary statements contained in those
filings. As a result of these risks and others, actual results
could vary significantly from those anticipated in this press
release, and Men's Wearhouse's and Jos. A. Bank's financial
condition and results of operations could be materially adversely
affected. For additional information on Men's Wearhouse, please
visit the Company's websites at www.menswearhouse.com,
www.mooresclothing.com, www.kgstores.com, www.twinhill.com,
www.dimensions.co.uk and www.alexandra.co.uk. For additional
information on Jos. A. Bank, please visit www.josbank.com.
Jos. A. Bank is not accepting for payment any shares that have
been tendered, and such shares will be returned, without expense,
to holders who have tendered such shares (or, in the case of shares
tendered by book-entry transfer through the DTC, such shares will
be credited to the appropriate account maintained with the DTC).
The tender offer consideration of $65.00 in connection with the Eddie Bauer
transaction will not be paid or become payable to any holders of
shares pursuant to the offer by Jos. A. Bank Under no
circumstances should shares be tendered to the Jos. A. Bank or DTC
and, if tendered, such shares will not be accepted and will be
promptly returned to the tendering shareholder.
Appendix: Reconciliation of Jos. A. Bank Adjusted
EBITDA
The following sets forth a reconciliation of the Jos. A. Bank
fiscal year 2013 adjusted EBITDA range.
Note: All amounts are preliminary.
|
Low
|
High
|
Net Income
|
$63.1
|
$64.5
|
Provision for Income
Taxes
|
38.9
|
39.5
|
Interest Income,
net
|
(0.4)
|
(0.4)
|
Depreciation and
Amortization
|
29.8
|
29.8
|
EBITDA,
Unadjusted
|
$131.4
|
$133.4
|
Asset
Impairment
|
1.6
|
1.6
|
Strategic
Professional Fees
|
3.0
|
3.0
|
EBITDA,
Adjusted
|
$136.0
|
$138.0
|
Contacts:
Men's Wearhouse
Ken
Dennard
Dennard ▪ Lascar Associates
(832) 594-4004
ken@dennardlascar.com
http://ir.menswearhouse.com/
Dan Katcher / Tim Lynch / Aaron
Palash
Joele Frank, Wilkinson Brimmer
Katcher
(212) 355-4449
Jos. A. Bank
Media:
Thomas Davies/Molly Morse
Kekst and Company
212-521-4873/212-521-4826
thomas-davies@kekst.com
molly-morse@kekst.com
Investment Community:
David E. Ullman
EVP/CFO
Jos. A. Bank
410-239-5715
[1] EBITDA is defined as earnings before interest, taxes,
depreciation and amortization.
[2] Reflects midpoint of the EBITDA guidance Jos. A. Bank provided
in February 14, 2014 investor
presentation.
SOURCE Men's Wearhouse