Mill Road to get $130 million of facilities to fund R.G. Barry merger

By Jennifer Chiou

New York, May 7 - R.G. Barry Corp. and private equity firm Mill Road Capital announced a merger agreement under which Mill Road will acquire all of the outstanding shares of R.G. Barry for $19.00 per share in cash, and Mill Road will partly fund the acquisition using $130 million of facilities provided by GCI Capital Markets LLC.

The merger, reflecting an equity value of about $215 million, will result in R.G. Barry becoming a wholly owned subsidiary of a newly formed corporation controlled by Mill Road.

According to a filing with the Securities and Exchange Commission, GCI Capital, or Golub, committed to provide the following:

• An $85 million senior secured first-lien term loan facility due in five years;

• A $30 million senior secured second-lien term loan facility due in 5.5 years; and

• A $15 million senior secured revolving credit facility due in five years.

Interest on the loan will be Libor plus 500 basis points for the first-lien loans and Libor plus 900 bps for the second-lien loan. Both will have a Libor floor of 1%. The revolver will have a 50 bps fee for the unused portion.

The filing stated that the $19.00 per share cash merger price represents a premium of 18% compared to the 30-day average price of the stock prior to the announcement of Mill Road's initial proposal on Sept. 11, 2013 and is 67% higher than the 52-week low and 6% higher than the 52-week high prior to the announcement.

R.G. Barry's board of directors unanimously approved the merger agreement.

Based in Pickerington, Ohio, RG Barry creates and markets accessories.

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