Capmark Acquires Orchard Brands for $410 million

orchard-brands-logo-300Orchard Brands Corp., a multichannel retailer of apparel and home products focused on serving women and men above the age of 50, announced on May 27 that the company has reached a definitive agreement to be acquired by Capmark Financial Group Inc.

Under the terms of the transaction, Capmark will acquire Orchard Brands for approximately $410 million in cash, subject to various pre- and post-closing adjustments. The acquisition will be funded with a combination of cash on-hand, a new term debt syndication, and a new asset-based lending facility.

Orchard Brands’ titles include Appleseed’s, Bedford Fair, Blair, Draper’s & Damon’s, Gold Violin, Haband, LinenSource, Norm Thompson Outfitters, Old Pueblo Traders, Sahalie, Solutions, The TOG Shop, Willow Ridge, and WinterSilks.

Capmark is a holding company whose businesses include Bluestem Brands, Inc., a multi-brand, online retailer of a broad selection of name-brand and private label general merchandise serving low- to middle-income consumers nationwide. Bluestem operates Fingerhut, and PayCheck Direct brands. Capmark acquired Bluestem for approximately $565 million in cash in September 2014.

“The Orchard portfolio of brands provides us with the opportunity to serve a new customer base and deepen our private-label merchandise design and sourcing expertise, which fits nicely into the theme of our company’s long-term strategic plan,” said Steve Nave, Capmark’s President and Chief Executive Officer.

Jim Fogarty, Chief Executive Officer of Orchard Brands, said he is very proud of what the Orchard Brands team has accomplished and confident that combining with Capmark is a great next step for the company.

“The transaction will place Orchard Brands into a large organization with a diversified portfolio of brands, a strong combined operating platform, and a powerful financial base,” Fogarty said. “The transaction is wonderfully synergistic, with Bluestem bringing strong expertise in consumer finance and hard goods to our brand teams, and our Orchard teams bringing strong expertise in designing, sourcing and selling women’s and men’s apparel to the Bluestem brand teams.”

The transaction, which has been approved by the Boards of Directors of both companies, is expected to close in the third quarter of 2015, subject to customary closing conditions, including, among other things, the expiration or early termination of the waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 and completion of transaction financing.

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