The sale of Maurices Inc. – which is valued at about $300 million – comes as part of an Ascena review to enhance shareholder value, the company said. The deal, subject to customary closing conditions, is expected to close by early summer.
Ascena expects to receive approximately $200 million in cash, after expenses, while still maintaining a minority interest in Maurices. The cash proceeds from the sale will be utilized to pay down an existing term loan balance, and/or to reinvest in the business, per the terms of Ascena’s credit facilities.
Ascena initiated its Change for Growth plan in 2016, according to Chairman and Chief Executive Officer David Jaffe. The program is set to deliver a “leaner operating model and enhanced competitive capabilities,” Jaffe said in a statement.
Maurices will still be supported by Ascena’s shared business services platform through a managed services agreement for IT, supply chain, sourcing and other back office functions. Ascena said the deal will further the development of its platform services business.
Jaffe said the ongoing arrangement will provide a guide for offering third-party platform services to others.
“The sale of a majority interest in Maurices underscores the value that exists in our portfolio brands. The review and evaluation process we are undertaking, with the help of outside advisors, is designed to recognize this value on behalf of Ascena shareholders,” Jaffe said in a prepared statement.
Guggenheim Securities and Proskauer Rose LLP advised Ascena on financial and legal matters, respectively. PJ Solomon and Clifford Chance served as financial and legal advisors, respectively, to OpCapita.
Ascena is a national specialty retailer offering apparel shoes and accessories under such brands as Ann Taylor, Dress Barn, Lane Bryant and Justice.