By Lisa Kerner
Charlotte, N.C., May 22 - Payless ShoeSource, Inc. entered into a definitive agreement to acquire Stride Rite Corp. for $20.50 per share in an all-cash transaction valued at $800 million, including debt.
The $20.50 per-share price is a 32% premium over Stride Rite's average stock price over the past 90 days, according to a company news release.
Both shoe retailers' boards have unanimously approved the deal, which is expected to close in the third quarter.
Following the transaction, Payless will rename the company Collective Brands, Inc. and, as a holding company, will operate three standalone business units.
The acquisition will be financed through existing cash resources and committed new financings.
Payless' chief executive officer and president Matt Rubel will serve as chief executive officer of Collective Brands, to be based in Topeka, Kan. Stride Rite will remain in Lexington, Mass.; and Collective Licensing will continue to be based in Denver. Each operating unit will retain its own names, identities and discrete operations.
"Through this acquisition and as indicated by the change in our name, we are creating a leading, innovative global footwear, accessory and lifestyle brand company that is well positioned to grow in both our key domestic and international markets," Rubel said in the release.
"Together we can provide the customers, employees and business partners of all three business units with greater opportunities and investors with enhanced value."
Citi and Financo, Inc. advised Payless, while Goldman Sachs advised Stride Rite.
| Acquirer: | Payless ShoeSource, Inc.
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| Target: | Stride Rite Corp.
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| Price per share: | $20.50
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| Announcement date: | May 22
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| Expected closing: | Third quarter
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| Stock price for target: | NYSE: SRR: $15.18 on May 21
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