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Dress Barn $100 million convertible talked to yield 2.75%-3.25%, up 25%-30%
Nashville, Dec. 6 - Dress Barn Inc. launched $100 million of 20-year convertible notes after Monday's close, with price talk of a 2.75% to 3.25% coupon and 25% to 30% initial conversion premium.
Banc of America Securities LLC and JPMorgan Securities Inc. are joint lead managers of the Rule 144A deal, which was slated to price after the close Wednesday. Co-managers are Wells Fargo & Co. and SunTrust Robinson Humphrey.
The senior notes will be non-callable for seven years, with puts in years seven, 10 and 15. There is a 120% contingent conversion trigger and 120% contingent payment trigger.
Full dividend and takeover protection also is included.
A $15 million greenshoe is available.
The Suffern, N.Y.-based retailer said proceeds would be used to finance a part of the cost of its previously announced acquisition of Maurices Inc. If that acquisition is not completed, Dress Barn said proceeds would go toward general corporate purposes.
On Nov. 19, Dress Barn announced plans to buy Maurices, which sells apparel and accessories for young women and men, for $320 million. Dress Barn expects the acquisition would add to earnings within the first full year of combined operations and forecasts annual sales of the combined company in excess of $1.1 billion.
For fiscal first quarter ended Oct. 30, Dress Barn posted a 2% increase in net sales to $197.1 million. The company said Maurices had sales of $342 million in the fiscal year ended Feb. 28.
Dress Barn shares ended Monday off 3 cents, or 0.18%, to $16.84. The stock was down $1.75, or 10.39%, on the convertible news in after-hours trading.
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