Stock-for-stock merger expected to be neutral to earnings in the first full year of combined operations and accretive thereafter Dress Barn, Inc. to add 908 Justice stores, the leading specialty apparel retailer to tween girls Combined company to operate 2,465 locations, generating $2.4 billion of pro forma net sales Pro forma consolidated balance sheet, after repayment of Tween Brand, Inc.'s bank debt, expected to have over $200 million in cash and investments
SUFFERN, N.Y.--(BUSINESS WIRE)--Jun. 25, 2009--
Dress Barn, Inc. (NASDAQ - DBRN) and Tween Brands, Inc. (NYSE-
TWB) today jointly announced that they have entered into a
definitive agreement pursuant to which a subsidiary of Dress Barn, Inc.
will merge with Tween Brands, Inc. in a stock-for-stock transaction.
Under the terms of the merger agreement, each share of Tween Brands,
Inc. common stock will be exchanged for 0.47 shares of Dress Barn, Inc.
common stock. Based on Dress Barn Inc.’s stock price of $13.24 as of
June 24, 2009, this consideration would be equivalent to $6.22 per Tween
Brands, Inc. share, representing an aggregate equity value of
approximately $157 million. This represents a premium of 20% over Tween
Brands, Inc.’s closing stock price on June 24, 2009. Upon closing of the
transaction, Tween Brands, Inc.’s stockholders are expected to own
approximately 16% of Dress Barn, Inc.’s diluted outstanding shares. In
connection with the transaction, Tween Brands, Inc.’s outstanding bank
debt will be repaid.
Dress Barn, Inc. anticipates that the transaction will be neutral to
earnings in the first full year of combined operations and accretive
thereafter. On a trailing twelve months basis, the combined company has
generated in excess of $2.4 billion in net sales and currently operates
2,465 stores. The transaction, unanimously approved by each of Dress
Barn, Inc.’s and Tween Brands, Inc.’s Board of Directors, is expected to
close in the fourth quarter of calendar year 2009 and is subject to
Tween Brands, Inc. stockholder approval and other customary closing
David R. Jaffe, President and Chief Executive Officer of Dress Barn,
Inc., commented, “We are excited to have found another strategically
compelling transaction to drive superior value to our shareholders. The
Justice concept, which offers an attractive mix of well-priced fashion
for girls ages 7 to 14, will diversify and complement our existing
business. We are also pleased to welcome the talented and proven Tween
Brands, Inc.’s team into our organization. We look forward to working
together to fully realize the significant potential of this business.”
Upon completion of the acquisition, Tween Brands, Inc., which operates
the Justice retail chain, will operate as a separate subsidiary of Dress
Barn, Inc. Its management team, led by Mike Rayden, will continue to
manage operations and lead Justice’s future growth. Mike Rayden,
currently Chairman and Chief Executive Officer of Tween Brands, Inc.,
will report directly to David Jaffe.
Rayden commented, “We are exceptionally pleased to partner with dressbarn
and maurices. We intend to complete the transition of our
business to fully leverage the Justice concept and to further cement our
leadership position in the $12 billion tween girls apparel market. I
believe that our combined company will be formidable and have
significant competitive advantages in this increasingly challenging
market environment. We believe this merger with Dress Barn, Inc.
reinforces our ability to generate ongoing returns for shareholders.”
Jaffe continued, “We believe that Justice is a highly attractive
business that has come under significant pressure as a result of the
tight credit market and the challenging consumer environment. The
repayment of Tween Brands, Inc.’s bank debt immediately alleviates the
financial pressures on the Justice business so that it can reach its
full potential. The management at both companies believes there is an
excellent opportunity over the next several years to grow the operating
margin for the Justice business to a level at least consistent with that
generated by Dress Barn, Inc.’s existing consolidated operations. As we
saw with our integration of maurices, the implementation of best
practices across our entire organization can help to realize enhanced
sales and profitability. Additionally, we expect to realize economies of
scale in areas such as sourcing and real estate, as well as capture
other potential synergies and cost savings.”
Banc of America Merrill Lynch Securities is acting as financial advisor
and Proskauer Rose LLP as legal advisors for Dress Barn, Inc. Peter J.
Solomon Company is acting as financial advisor and O'Melveny & Myers LLP
as legal advisors to Tween Brands, Inc.
Conference Call Information
Dress Barn, Inc. and Tween Brands, Inc. will conduct a joint conference
call later this morning, June 25, 2009 at 11:00 AM Eastern Time to
review the transaction, followed by a question and answer session.
Parties interested in participating in this call should dial in at (800)
561-2693 five minutes prior to the start time, the passcode is 17719450.
The call will also be simultaneously broadcast at www.dressbarn.com
A recording of the call will be available shortly after its conclusion
and until July 25, 2009 by dialing (888) 286-8010, the passcode is
About Dress Barn, Inc.
Dress Barn, Inc. (NASDAQ - DBRN), is a leading national specialty
apparel retailer offering quality career and casual fashion apparel
through its dressbarn and maurices brands. As of June 24,
2009, the Company operated 841 dressbarn stores in 47 states and
716 maurices stores in 44 states. For more information, please
Dress Barn Forward-Looking Statement
Certain statements made within this press release may constitute
“forward-looking statements”, within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements are subject to certain risks and uncertainties that could
cause actual results to differ materially. The Company does not
undertake to publicly update or review its forward-looking statements
even if experience or future changes make it clear that our projected
results expressed or implied will not be achieved. Detailed information
concerning a number of factors that could cause actual results to differ
materially from the information contained herein is readily available on
our most recent report on Form 10-K for the year ended July 26, 2008 and
Form 10-Q for the quarter ended April 25, 2009.
About Tween Brands, Inc.
Headquartered in New Albany, Ohio, Tween Brands, Inc. (NYSE:TWB) is the
largest premier tween specialty retailer in the world. Through
powerhouse brands Justice and Limited Too, Tween Brands provides the
hottest fashion merchandise and accessories for tween (age 7-14) girls.
Known as the destination for fashion-aware tweens, Justice proudly
features outgoing sales associates who assist girls in expressing their
individuality and self-confidence through fashion. Visually-driven
catazines and direct mail pieces reach millions of tween girls annually,
further positioning Tween Brands as a preeminent retailer in the tween
Over 900 Justice stores are located throughout the United States and
internationally. Additionally, Tween Brands offers its fashions to tween
girls and their parents through its e-commerce site, www.shopjustice.com
For more information visit www.tweenbrands.com
Tween Brands, Inc. Safe Harbor
Statement Under the Private Securities Litigation Reform Act of 1995
Certain statements made in this press release may constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Statements in this
press release concerning the expected strength and competitive
advantages of the combined company and other activities, events or
developments that Tween Brands, Inc. expects, believes or anticipates
will or may occur in the future are forward-looking statements. These
statements involve a number of risks and uncertainties that could cause
actual results to differ materially from the potential results discussed
in the forward-looking statements. Among the factors that could
cause actual results and outcomes to differ materially from those
contained in such forward-looking statements are the following: the
failure of Tween Brands, Inc.’s stockholders to adopt the merger
agreement, delays in or failure to obtain any required regulatory
approvals with respect to the merger, failure to consummate or delay in
consummating the merger for other reasons, changes in laws or
regulations, changes in general economic conditions and other risks
relating to Tween Brands, Inc.’s business set forth in its filings with
the Securities and Exchange Commission (the “SEC”), including Tween
Brands, Inc.’s Quarterly Report on Form 10-Q for the fiscal quarter
ended May 2, 2009, which are available on the SEC’s Web site maintained
The forward-looking statements made herein are based on information
presently available to the management of Tween Brands, Inc. assumes no
obligation to publicly update or revise any forward-looking statements
included in this press release even if experience or future changes make
it clear that any projected results expressed or implied therein will
not be realized.
In connection with the proposed merger, Dress Barn, Inc. intends to file
with the SEC a Registration Statement on Form S-4 containing a proxy
statement/prospectus for the stockholders of Tween Brands, Inc. and each
of Dress Barn, Inc. and Tween Brands, Inc. plans to file other documents
with the SEC regarding the proposed merger transaction. The definitive
proxy statement/prospectus will be mailed to stockholders of Tween
Brands, Inc. Before making any voting or investment decision, Tween
Brands, Inc. stockholders and investors are urged to read the proxy
statement/prospectus and other documents filed with the SEC carefully
and in their entirety when they become available because they will
contain important information about the proposed transaction. Tween
Brands, Inc. stockholders and other investors will be able to obtain
copies of these materials (when they become available) without charge
from the SEC through the SEC’s Web site at www.sec.gov.
These documents (when they are available) can also be obtained free of
charge from Dress Barn, Inc. by directing a request to Dress Barn, Inc.,
30 Dunnigan Drive, Suffern, NY 10901 Attention: Investor Relations
Department (telephone: 845 369 4602) or accessing them on Dress Barn,
Inc.’s corporate Web site at www.dressbarn.com,
or from Tween Brands, Inc. by directing a request to Tween Brands, Inc.
8323 Walton Parkway, New Albany, OH 43054 Attention: Investor Relations
(telephone: 614 775-3739) or accessing them on Tween Brands, Inc.’s
corporate Web site at www.tweenbrands.com.
Dress Barn, Inc., Tween Brands, Inc. and certain of their respective
directors and executive officers may be deemed to be participants in the
solicitation of proxies from Tween Brands, Inc.’s stockholders in
connection with the proposed transaction under the rules of the SEC.
Information about the directors and executive officers of Dress Barn,
Inc. may be found in its Annual Report on Form 10-K for the year ended
July 26, 2008 filed with the SEC on September 24, 2008 and in its
definitive proxy statement relating to its 2008 Annual Meeting of
Shareholders filed with the SEC on November 5, 2008. Information about
the directors and executive officers of Tween Brands, Inc. may be found
in its Annual Report on Form 10-K for the year ended January 31, 2009
filed with the SEC on March 31, 2009 and in its definitive proxy
statement relating to its 2009 Annual Meeting of Stockholders filed with
the SEC on April 9, 2009. These documents can be obtained free of charge
from the sources indicated above. Additional information regarding the
interests of these participants will also be included in the proxy
statement/prospectus regarding the proposed transaction when it becomes
Source: Dress Barn, Inc.
DRESS BARN, INC.
Dress Barn, Inc.
Senior Vice President
James Palczynski, 203-682-8229
TWEEN BRANDS, INC.
Julie Sloat, 614-775-3739
Finance & Investor Relations
Tween Brands, Inc.
Investor Relations & Finance
James McCusker, 203-682-8245