The months-long back and forth is over. The Men's Wearhouse will acquire all outstanding shares of Jos. A. Bank’s common stock for $65 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., making it the fourth largest U.S. men's apparel retailer 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 CEO 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."
Ewert added that the combined company will have the operational flexibility to successfully execute on strategic plans at both brands and anticipates that the transaction will help drive significant shareholder value.
"Our board has been rigorously focused on pursuing a path for our shareholders that maximizes value creation,” added Robert N. Wildrick, chairman of the board of Jos. A. Bank. “We have been committed to pursuing a range of strategic alternatives to achieve that goal. The transaction 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."
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 conjunction with this transaction, Jos. A. Bank has terminated its agreement to acquire Everest Holdings, the parent company of Eddie Bauer. 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.
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.
BofA Merrill Lynch and J.P. Morgan Securities LLC are serving as financial advisers to Men's Wearhouse, and Willkie Farr & Gallagher LLP is serving as legal adviser. Goldman, Sachs & Co. and Financo, LLC are serving as financial advisers to Jos. A. Bank, and Skadden, Arps, Slate, Meagher & Flom LLP and Guilfoil Petzall & Shoemake, L.L.C. are serving as its legal advisers.