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TPG Capital and Leonard Green to acquire J.Crew Group

J.Crew Group, a retailer of apparel, shoes and accessories, has entered into a definitive agreement to be acquired by funds affiliated with TPG Capital and Leonard Green & Partners. 

Millard Drexler will continue as chairman and chief executive and maintain a significant equity investment in J.Crew.

Under the terms of the agreement, holders of the outstanding common shares of J.Crew will receive USD43.50 per share in cash, or a total of approximately USD3.0bn. The price represents a premium of 29 per cent to J.Crew’s average closing share price over the last month.

A special committee of the J.Crew board of directors, comprised of four independent directors and advised by independent financial and legal advisers, negotiated the transaction and recommended it to the full board.

The agreement was approved by the full board other than James Coulter, a partner of TPG Capital, and Drexler, who recused themselves from the vote.  

Drexler says: "I am pleased to announce this agreement as it delivers significant value to our shareholders. In addition, it is a clear endorsement of J.Crew and of the hard work and commitment of each and every one of our associates. As 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, 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."

Carrie Wheeler, partner of TPG Capital, says: "We are proud of our 13-year history with J.Crew since our investment in the company in 1997 and the success it has achieved during our partnership with Mickey. With his leadership, combined with the support of TPG Capital and Leonard Green & Partners, the company will be well positioned for the long term. We are looking forward to working with Mickey and his exceptional team and are excited by the prospect of continuing to expand the business."

The investor group has secured committed financing from Bank of America Merrill Lynch and Goldman Sachs Bank USA.

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