True Religion Apparel Inc. (TRLG) announced that it has entered into a definitive merger agreement with an affiliate of funds managed by TowerBrook Capital Partners L.P., the New York and London-based investment management firm, in a take-private transaction valued at about $835 million.
As per the terms of the merger agreement, TowerBrook will acquire all of the outstanding shares of True Religion common stock for $32.00 per share in cash. This represents a premium of about 52% to True Religion's share price on October 9, 2012, the day before the company announced that it had begun to explore strategic alternatives.
The Board of Directors of True Religion unanimously approved the merger agreement and recommends that True Religion shareholders vote in favor of the transaction.
The merger is subject to approval from True Religion's shareholders, regulatory approvals and other customary closing conditions. The transaction is expected to close in the third quarter of 2013.
As per the Merger Agreement, True Religion Apparel has suspended its regular quarterly dividend through the earlier to occur of the closing of the merger or expiration of the Merger Agreement.
In a separate press lease, True Religion Apparel reported that its first-quarter net income attributable to the company decreased to $0.5 million, or $0.02 per share, from $10.4 million, or $0.41 per share in the year ago quarter.
Excluding the separation costs and the review of strategic alternatives costs, adjusted net income attributable to the company was $5.7 million, or $0.22 per share for the first quarter of 2013.
Total net sales for the quarter increased to $120.8 million, a 13.1% increase compared to the same period in 2012.
Analysts polled by Thomson Reuters expected the company to report earnings of $0.34 per share on revenues of $113.19 million for the quarter. Analysts' estimates typically exclude special items.
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