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Stanley Black & Decker $SWK to Acquire @Craftsman Tools from Sears $SHLD for $900M

Stanley Black & Decker $SWK to Acquire @Craftsman Tools from Sears $SHLD for $900M

Sears Holdings initiated a formal process to explore strategic alternatives for its Kenmore, Craftsman and DieHard brands, and its Sears Home Services, with the assistance of Citigroup Global Markets and LionTree Advisors, as reported last year by ExitHub. The deal provides Stanley Black & Decker with the rights to develop, manufacture and sell Craftsman-branded products in non-Sears Holdings retail, industrial and online sales channels across the U.S. and in other countries. As part of the agreement, Sears Holdings will continue to offer Craftsman-branded products, sourced from existing suppliers, through its current retail channels via a perpetual license from Stanley Black & Decker, which will be royalty-free for the first 15 years after closing, then 3% thereafter. Today only approximately 10% of Craftsman-branded products are sold outside of Sears Holdings and the agreement will enable Stanley Black & Decker to significantly increase Craftsman sales in these untapped channels. “Craftsman is a legendary, American brand with tremendous consumer awareness built on a legacy of producing quality products at a great value,” said Stanley Black & Decker President and CEO James M. Loree. “This agreement represents a significant opportunity to grow the market by increasing the availability of Craftsman products to consumers in previously underpenetrated channels. We intend to invest in the brand and rapidly increase sales through these new channels, including retail, industrial, mobile and online. To accommodate the future growth of Craftsman, we intend to expand our manufacturing footprint in the U.S. This will add jobs in the U.S., where we have increased our manufacturing headcount by 40% in the past three years. Sears Holdings’ Chairman and Chief Executive Officer Edward S. Lampert stated, “We are pleased to reach this agreement, after determining that externalizing the Craftsman brand would accomplish our goals of driving value for Sears Holdings and positioning Craftsman for future growth. This transaction represents a significant step in our ongoing transformation to a membership focused business model.” Lampert, who is also the founder, chairman and CEO of ESL Investments, his hedge fund based in Greenwich, Connecticut, engineered today’s Sears Holdings by merging Kmart and Sears Roebuck in 2005. Existing sales of Craftsman products outside the Sears Holdings and Sears Hometown distribution channels, which will be assumed immediately upon closing by Stanley Black & Decker, were approximately $200 million over the last 12 months. The sale of Craftsman branded products is expected to contribute approximately $100 million of average annual revenue growth for approximately the next ten years. The transaction is expected to be accretive to earnings by approximately $0.10-$0.15 per share in year one, increasing to approximately $0.35-$0.45 by year five and to approximately $0.70-$0.80 by year ten, excluding approximately $20 million of deal-related costs. The deal, which was approved by the Boards of Directors of both companies, is expected to close during 2017, subject to customary closing conditions and regulatory approvals. Stanley Black & Decker, an S&P 500 company, is a diversified global provider of hand tools, power tools and related accessories, mechanical access solutions and electronic security solutions, healthcare solutions, engineered fastening systems, and more. Sears Holdings is a leading integrated retailer focused on seamlessly connecting the digital and physical shopping experiences. Sears Holdings is home to Shop Your Way, a social shopping platform offering members rewards for shopping at Sears and Kmart as well as with other retail partners. The company operates through its subsidiaries, including Sears, Roebuck and Co., founded in 1886, and Kmart Corp., founded in 1899, with full-line and specialty retail stores across the United States. Photo: Edward S. Lampert, Chairman and CEO, Sears Holdings Corp, and ESL Investments.]]>

Infoblox $BLOX Exploring Exit Under Pressure From Activist Starboard Value

Infoblox $BLOX Exploring Exit Under Pressure From Activist Starboard Value

Infoblox (NYSE: BLOX) reported its financial results for its fourth fiscal quarter and fiscal year ended July 31, 2016, as the company is said to be exploring a sale under pressure by activist investor Starboard Value LP, which recently disclosed a stake of about 7% in Infoblox. The company’s market capitalization climbed 6.55% today to $1.22 billion amid ongoing potential buyout rumors. Infoblox reportedly hired Morgan Stanley to help defend itself from Starboard’s CEO Jeff Smith, who is known as “the most feared man in corporate America” these days. Indeed the $4.83 billion sale of Yahoo’s (NASDAQ: YHOO) core business to Verizon (NYSE: VZ) is said ti have come to fruition largely as a result of unrelenting pressure exerted by Starboard. “We had a strong finish to fiscal 2016,” said Jesper Andersen, president and chief executive of infoblox. “Fourth quarter revenue grew 5% sequentially, and we achieved record fiscal 2016 revenue.” Total net revenue for the fourth quarter of fiscal 2016 was $86 million.. Total net revenue for fiscal 2016 was a record $358 million, an increase of 17% compared with the total net revenue of $306 million in fiscal 2015. On a GAAP basis, the company reported a net loss of $10 million, or $0.18 net loss per diluted share, for the fourth quarter of fiscal 2016, compared with a net loss of $5 million, or $0.08 net loss per diluted share, for the fourth quarter of fiscal 2015. For fiscal 2016, the company reported a GAAP basis net loss of $14 million, or $0.24 net loss per diluted share, compared with a net loss of $27 million, or $0.48 net loss per diluted share, in fiscal 2015. The company also announced results of the Infoblox Security Assessment Report for the second quarter of 2016, which found that 40 percent—nearly half—of files tested by Infoblox show evidence of DNS tunneling, a significant security threat that can indicate active malware or ongoing data exfiltration within an organization’s network. Infoblox was recognized as the market-share leader in enterprise-grade DDI in a recent report from IDC. Infoblox market share increased to 49.9 percent in 2015 from 46.7 percent in 2014. No other competitor had a market share greater than 15 percent. Infoblox delivers actionable network intelligence to enterprise, government, and service provider customers around the world. As the industry leader in DNS, DHCP, and IP address management, the category known as DDI, Infoblox provides control and security from the core—empowering thousands of organizations to increase efficiency and visibility, reduce risk, and improve customer experience. Starboard Value LP is a New York-based investment adviser and activist hedge fund with a focused and fundamental approach to investing in publicly traded U.S. companies. Starboard invests in what it refers to as “deeply undervalued companies and actively engages with management teams and boards of directors to identify and execute on opportunities to unlock value for the benefit of all shareholders.” As of March 31, 2016, Starboard Value held 22 institutional investment positions with a total market value of $2.58 billion, according to its SEC 13-F filings, the largest of which was its stake in Yahoo Inc., consisting of roughly 12.3 million YHOO shares valued at $484 million. According to FactSet, through March 31, 2016 Starboard has waged 46 campaigns and gained a total of 66 board seats since its inception in 2011. Jeffrey Smith is the co-founder, chief executive and chief investment officer of Starboard, which was spun off in 2011 from hedge fund Ramius LLC, a subsidiary of the Cowen Group Inc. (NASDAQ: COWN) — whose chairman Peter A. Cohen, was the former vice chairman of Republic New York Corp. and former chairman and CEO of Shearson Lehman Brothers. Smith previously served as vice president and board member of his father’s company, the Fresh Juice Company, until it was reportedly sold for $20 million in 1998. He began his career in the M&A department at Société Générale, after graduating from the Wharton School of Business with a BS in Economics. Smith currently serves on the board of Yahoo! Inc., and is the chairman of Advance Auto Parts Inc. He was formerly chairman of Darden Restaurants Inc. and Phoenix Technologies Ltd., and formerly served on the boards of Quantum Corp., Office Depot Inc., Regis Corp., Surmodics Inc., Zoran Corp., Actel Corp., Kensey Nash Corp., and S1 Corp. Photo: Jeffrey Smith, Co-Founder, CEO & CIO of Starboard Value LP.]]>

FAB Partners to Acquire $CIFC for $333M With Qatari Royal Family Backing

FAB Partners to Acquire $CIFC for $333M With Qatari Royal Family Backing

fabulous‘ former senior executives from Deutsche Bank and Goldman Sachs, agreed to acquire New York-based private debt investment manager CIFC LLC (NASDAQ: CIFC) for $333 million in cash, with backing from the Qatari royal family’s Supreme Universal Holdings Ltd. The move comes five weeks after the Qatari royal family’s Paramount Services Holdings and Supreme Universal Holdings, each raised their respective stakes in Deutsche Bank to nearly 5 percent, concurrently followed by the bank’s nomination of Stefan Simon, a partner at the German law firm Flick Gocke Schaumburg, to its supervisory board, heeding the Qatari shareholders’ advice. FAB’s offer price of $11.46 per share represents a premium of more than 60% over CIFC’s closing share price on August 19, 2016, and a premium of nearly 160% over the January 27, 2016 closing share price, the day prior to CIFC’s announcement of its pursuit of strategic alternatives. Founded in 2005 and based in New York, CIFC is a $14 billion private debt manager specializing in U.S. corporate loan strategies. CIFC has over 75 employees, including more than 30 dedicated investment professionals. The firm serves more than 200 institutional investors globally and is one of the largest managers of collateralized loan obligations (CLOs) in North America. FAB is a global alternative investment platform that focuses on originating, structuring and actively managing investments across all asset classes, sectors and geographies. FAB, which stands for Faissola, Ariburnu and Al-Bassam, was founded by the firm’s eponymous team of capital markets and investment management experts Michele Faissola, Dalinc Ariburnu and Nizar Al-Bassam. “We are pleased to have reached this agreement with FAB, which follows a thorough review of strategic and financial alternatives that generated interest from over a dozen suitors,” said CIFC chairman Jeffrey S. Serota. “CIFC is a leading private debt investment platform and one of the largest CLO managers in the industry and we are thrilled that this acquisition marks our first foray into the U.S. credit markets,” said FAB co-founding partner Michele Faissola. “CIFC’s highly experienced investment team, institutional infrastructure and blue-chip client base, make them an ideal partner for us as we look to access the U.S. market for our clients. Our clients are committed to capitalizing on both current and future investment opportunities in the U.S. and we view CIFC as our beachhead into these exciting opportunities.” “The depth and breadth of the team Steve and his partner, Oliver Wriedt, have built was a key consideration in our decision to choose the CIFC platform as our first major investment geared at accessing the U.S. market,” added FAB co-founding partner Nizar Al-Bassam. The deal has been approved by CIFC’s board of directors. Columbus Nova, CIFC’s majority shareholder, has agreed to vote its shares in favor of the transaction. The deal is subject to CIFC’s shareholders’ approval, regulatory approvals and other customary closing conditions, and is expected to close this calendar year. J.P. Morgan Securities LLC is serving as exclusive financial advisor to CIFC and Dechert LLP and Latham & Watkins LLP are serving as legal counsel. Moelis & Company LLC is acting as exclusive financial advisor to FAB, and Weil, Gotshal & Manges LLP and Ernst & Young LLP are serving as legal advisor and accounting & tax advisor, respectively. Before co-founding FAB, and until April 2016, Al-Bassam was Head of Central and Eastern Europe, Middle East, and Africa for Capital Markets & Treasury Solutions, Sales, Investment Banking and Commercial Banking Coverage at Deutsche Bank. He was a member of various governance and management committees at Deutsche Bank, including Global Capital Markets & Treasury Solutions Executive Committee, Global Emerging Markets Management Committee and the European Corporate Finance Management Committee. He also served on the boards of a number of companies, including Abraaj Capital, Deutsche Gulf Finance and Saffar Holdings. Ariburnu previously served as a senior partner and global co-head of fixed income, currency and commodity sales at Goldman Sachs, where he served as member of Goldman Sachs’ European Management Committee, Partnership Committee, and Securities Division Global Executive Committee. Before that, he was Global Head of Emerging Markets Group at Deutsche Bank and a member of the Securities Division Global Executive Committee. Faissola previously served as Head of Deutsche Asset & Wealth Management, one of the four divisions of the bank, managing total client assets of almost $1.3 trillion. He was also a member of the Deutsche Bank Group Executive Committee. In this role he supervised a team of over 6,000 people in 33 countries. He was also chairman of the DWS Asset Management (Frankfurt) and chairman of Deutsche Bank Switzerland. Photo: HH Sheikh Tamim bin Hamad Al Thani, Emir of Qatar. (Courtesy, Georgetown University)]]>

American Apparel New Owners Exploring Exit, Hire Houlihan Lockey

American Apparel New Owners Exploring Exit, Hire Houlihan Lockey

Reorg Research. In addition, “The 27-year-old teen retailer, which boasts on its Web site that its togs are ‘Designed, Cut and Sewn in Los Angeles,’ is making plans to pull up stakes and move east — possibly to North Carolina or Tennessee, where the minimum wage is $7.25,” the New York Post reported. American Apparel’s manufacturing is based in a seven-story 800,000-square-foot factory in downtown Los Angeles, where it produces more than 55,000 different products and garments. The company also owns and operates its own fabric dye house, garment dye house, and knitting facility, all based in Los Angeles. According to The New York Times, in 2006 American apparel was “the single largest garment factory in the United States.” The erstwhile fashion empire went “from being the coolest company on the block when it arrived in Britain in 2004,” according to The Guardian, which named American Apparel “label of the year” in 2008, to chapter 11 bankruptcy in October 2015, due to ongoing losses. “The label’s progressive labour standards and high voltage ads made it notorious – from dorm room project to generation-defining brand,” says Dazed writer Julie Zerbo. “After settling in Los Angeles in 1997, Charney began to make waves, challenging the labour standards of the local garment industry by paying higher wages (two times higher than the standard wage at times).” “American Apparel had a very precise identity to uphold: attainable aspiration – those hot, ‘real’ twenty-somethings that appeared in their images,” she added. “They took on larger competitors, such as The Gap, by catering to those experiencing logo fatigue. From early on, Charney eschewed logos – like the brand names his rivals were slapping on most of their t-shirts and sweatshirts.” In December 2014, Charney was forced out after an investigation for misuse of company funds and inappropriate conduct with employees. In January 2016, American Apparel rejected a bid reportedly valued at $300 million from Charney’s backers, Atlanta, Georgia-based family office and independent venture capital investor Hagan Capital Group, and Dallas, Texas-based early-stage venture capital investor Silver Creek Ventures. In February 2016, American Apparel exited bankruptcy and is now privately owned by its creditors under a financial restructuring plan whereby the company converted $230 million in a debt-for-equity swap. The company’s new owners include Standard General, Monarch Alternative Capital, Coliseum Capital, and Goldman Sachs Asset Management. The investor group also reportedly arranged a $40 million loan to help it exit bankruptcy, and injected another $40 million in new debt and equity. The holdings of former American Apparel shareholders, including Charney, became worthless. In February, Charney was said to be starting from the bottom again on a venture that sounds exactly like American Apparel, according to WWD. The new project is backed by Chad Hagan, president of Hagan Capital Group, who backed Charney’s bid to reclaim American Apparel. Hagan reportedly said the new company will make basics for men and women, will manufacture everything in the US, and will focus on wholesale in the early stages. “Sound familiar?” asks racked contributor Cameron Wolf. [caption id="attachment_433333" align="aligncenter" width="1024"]dov_charney Dov Charney, Founder and former Chairman & CEO of American Apparel.[/caption] “What’s important to us now is we’re able to form this new venture and put Dov at the helm and we’re going to do basics again,” Hagan told WWD. “We don’t want to just start with some funny, online brand. We’re going to do what Dov does best and then establish a robust e-commerce system.” “We hope to create a brand that captures the attention of the world. It will be irreverent and authentic.” Charney revealed on PBS during a recent interview with Tavis Smiley about his upcoming entrepreneurial ventures in downtown Los Angeles. “Whatever the past is, it is. I’m moving forward and I’m going to build a world-class company right here in Los Angeles,” the 47-year-old Canadian-born artist and industrialist said. “Long known for edgy, sexually charged advertising and store displays, the company lost its grip on the hottest fashion trends and basic retailing strategy, with stores selling the same goods year-round and factories churning out swimsuits in September,” according to USA Today. Paula Schneider, the new CEO, “has outlined a strategic path to rehab the company’s image through a mix of new marketing, products and store design,” it added. Schneider is an advisor on private equity acquisitions, brand strategies, operations and growth, through her firm Paula Schneider Consulting, since 2013. She’s an experienced senior executive in the apparel/fashion sector, who previously served as CEO and director at Big Strike LLC, a portfolio company of The Gores Group. She’s a former director at J. Mendel, as well as president of Warnaco Swimwear Group and BCBG Max Azria, among others. To understand why American Apparel has declined so spectacularly, take a stroll through Cambridge, Mass. by the Harvard campus, and you’ll notice that, “the store design is exactly as it was 10 years ago,” said racked contributor Elizabeth Segran. “It’s reminiscent of a factory, with stark white walls covered in metal racks and harsh overhead lighting. On the walls are enormous posters that capture the 1970s porn aesthetic: a woman in a sheer triangle bra suggestively stares at the camera on her hands and knees, a woman clad in nothing but legwarmers and panties looks more demure.” “American Apparel’s risqué marketing suggested a raw, empowered sexuality when it first entered the scene. Now it’s inseparable from the troubling exploits of company founder Dov Charney, who was ousted (in 2014) after the board compiled a long list of strikes like sleeping with employees, walking around the factory naked, and masturbating in front of a journalist,” she added. “Another reason these stores are doing so poorly? What was once considered “hipster style” has gone completely mainstream.”]]>