Private Equity Firms Agree to Buy J. Crew
J. Crew has succeeded in recent years with a brand quality
approach even as many others have gone the price first and last route. The
First Lady, Michelle Obama, wears the company’s clothes and investors have
liked (for the most part) the chain’s business and stock performance.
turns out, private equity firms TPG Capital and Leonard Green & Partners
are also admirers of the way Mickey Drexler and company have gone about their
business. The two investment firms have agreed to acquire J. Crew in a deal worth
roughly $3 billion or $43.50 a share in cash to make the deal. TPG will take
a 75 percent stake in the merchant and Leonard Green will acquire the rest.
price being paid for J. Crew represents a premium of 29 percent to the company’s
average closing price over the past month. The deal, however, was well below
J. Crew’s 52-week high.
Mr. Drexler, chairman and CEO of J. Crew, said in a press
release, "I have
always said, we are in this for the long term and we do what we do day in and
day out so we can deliver the best possible products to our customers. TPG Capital,
with whom we have a long working relationship (13 years), along with Leonard
Green & Partners, are both well respected private investment firms whose
substantial resources and experience will enable us to invest in our future growth."
Sozzi, an analyst with Wall Street Securities, wrote in a client note that
TPG Capital and Leonard Green were "getting a strong management team led
by Mickey Drexler, a productive mall-based store portfolio, and a growing outlet
Discussion Questions: Were you surprised by J. Crew’s decision to sell? What
do you expect to happen now that it is owned by TPG Capital and Leonard Green & Partners?
- Millard Drexler Will Remain as Chairman and CEO and Significant Shareholder
Transaction Valued at $3.0 Billion – J. Crew/PRNewswire
- It’s Official: J. Crew to Sell Itself for $3 Billion – DealBook/The
New York Times
- J. Crew agrees to buyout, stock surges 16% – CNNMoney.com
- J. Crew Shares Top Reported Buyout Offer Before Trading Halt – Dow Jones
Newswires/The Wall Street Journal