PE firm Sycamore to acquire department store operator Belk for $3 bn
25 Aug 2015
Belk Inc yesterday said it had agreed to be sold to New York private-equity group Sycamore Partners for $3 billion, potentially ending its run as an independent, family-owned retailer after 127 years.
Tim Belk, its chairman and chief executive, would retain charge after the merger. Belk would be owned in entirety by investment funds managed by Sycamore.
Belk's board of directors and third-generation family ownership were looking to a sale or major investment partnership for the iconic department store chain for several months as part of a strategy for ensuring financial stability in a retail environment in which online sales are pushing sales more than store sales.
The deal would be completed in the fourth quarter, with Belk shareholders getting $68 in cash for each share.
The deal would require regulatory and shareholder approval.
According to the companies a majority of Belk's voting shares had committed to approving the deal.
Belk operates 66 department stores in North Carolina with a workforce of 1,300 at headquarters in 23,000 workers overall. Belk sales in fiscal 2014 stood at $4.1 billion.
The company said in a regulatory filing ''we don't anticipate any layoffs or store closings as a result of this transaction.''
''Sycamore has been very complimentary of our team of associates and excited about both our corporate office and our footprint of stores. They understand our unique position in the marketplace and our potential for further growth.''
Tim Belk said in a statement that the company is ''delighted to have found a financial partner that sees what we see in Belk: a 127-year-old brand that remains relevant today with exceptional customer loyalty in small, medium and large cities throughout the South.''
Under the terms of the agreement, Belk stockholders would receive $68 for each of their shares.
According to Belk certain shareholders representing the bulk of its shares had agreed to vote in favor of the deal.
The company operates close to 300 stores across 16 Southern states.
The deal, approved unanimously by Belk's board, remains subject to shareholder and regulatory approvals. The deal would close in the fourth quarter of calendar 2015.
US department store chain Belk Inc had been exploring a sale that could value the mid-range to upscale department store in the US at around $4 billion. (See: US department store Belk Inc up for sale with $4 bn valuation).
