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Bluestem Brands to be acquired by Capmark Financial Group

Bluestem Brands is to be acquired by Capmark Financial Group for approximately USD565 million in cash, subject to various pre-and post-closing adjustments.

Capmark expects to fund the purchase price and associated transactional expenses with cash on hand, an equal amount of cash invested in Capmark by affiliates of Centerbridge Partners through the exercise of warrants and a USD300 million term debt facility led by Credit Suisse, Jefferies & Co. and US Bank.
 
Certain members of Bluestem’s management team are also investing in Capmark in connection with the transaction.
 
Upon completion of the transaction Steve Nave, Bluestem’s chief executive officer, will become chief executive officer of Capmark Financial Group and join the company’s board of directors. Bluestem Brands will remain headquartered in Eden Prairie, Minnesota.
 
“Joining with Capmark offers an excellent opportunity for Bluestem to enhance its ability to deliver industry-leading growth and provide greater access to quality merchandise with flexible payment options to the customers we serve,” says Steve Nave, president and chief executive officer of Bluestem Brands.
 
The transaction is expected to close in the fourth quarter of 2014 and is subject to customary conditions, including compliance with the filing and waiting period requirements under Hart-Scott-Rodino Act.
 
Bluestem’s chairman, Brian Smith, says: “In addition to being great for the future of Bluestem, this transaction will provide meaningful liquidity to our original investors and existing shareholder group.”
 
Bluestem is being advised by its financial advisor Lazard Middle Market and by its counsel Skadden Arps Slate Meagher & Flom and Faegre Baker Daniels. Capmark is being advised by its financial adviser Houlihan Lokey Capital and by its counsel Kramer Levin Naftalis & Frankel. Centerbridge and Capmark are also being advised by their counsel Weil Gotshal & Manges.

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