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Gymboree to be acquired by Bain Capital

Affiliates of Bain Capital have agreed to acquire all the outstanding stock of retail firm Gymboree for USD65.40 per share, or USD1.8bn.

Under the terms of the agreement, which has been unanimously approved by Gymboree’s board of directors, Gymboree stockholders will receive USD65.40 in cash for each outstanding share of Gymboree common stock they own.

This represents a 57.4 per cent premium to the company’s unaffected share price on 30 September 2010, before recent market rumours of a transaction, and a 23.5 per cent premium to Gymboree’s closing stock price on 8 October, the last full trading day before the announcement.

“We are pleased to announce this transaction as it delivers significant value to our shareholders,” says Matthew McCauley, chairman and chief executive officer of Gymboree. “We want to thank our employees for their hard work and dedication to Gymboree. Bain Capital is a world-class asset management firm with substantial resources and investment experience in the retail industry, and we believe they will be a great partner as we go forward as a private company.”

“Gymboree is a terrific company with incredible brand strength and a large population of extremely satisfied customers," says Jordan Hitch, a managing director at Bain Capital. “We look forward to working with Matthew McCauley and the company’s proven and experienced management team.”

Under the terms of the agreement, it is anticipated that affiliates of Bain Capital will commence a tender offer for all of the outstanding shares of Gymboree shortly following the execution of the agreement.

Bain Capital has committed financing from Credit Suisse and Morgan Stanley in an amount necessary to complete the transaction.

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