Saks to Sell Northern Department Store to Bon-Ton for $1.185 Billion
October 31, 05
Retailer Saks Inc announced today (Monday) it has reached an agreement to sell its Northern Department Store Group (NDSG) to The Bon-Ton Stores, Inc. for $1.1 billion in cash plus the assumption of approximately $85 million of liabilities, including approximately $35 million in capitalized leases.
Bon-Ton will acquire NDSG's operations consisting of real and personal property, operating leases, and inventory associated with 142 NDSG units (31 Carson Pirie Scott stores, 14 Bergner's stores, 10 Boston Store stores, 40 Herberger's stores, and 47 Younkers stores); the administrative/headquarters facilities in Milwaukee, Wisconsin; and distribution centers located in Rockford, Illinois, Naperville, Illinois, Green Bay, Wisconsin, and Ankeny, Iowa.
The 142 stores being sold represent 15.1 million gross square feet and are located throughout 12 Midwestern and Great Plains U.S. states. NDSG generated revenues of approximately $2.2 billion in 2004.
The transaction is not closed and is subject to certain conditions, including Bon-Ton's financing for the transaction and the expiration or termination of all waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act, among other conditions.
R. Brad Martin, Chairman and CEO of Saks, noted, "Over the last several months, we have thoroughly weighed strategic alternatives for our Northern Department Store Group. We believe this transaction is in the best interests of our shareholders, our associates, and our customers."
“This action is a result of a strategic alternative process announced earlier this year where the company put in place a program to carefully consider its mix of businesses and their future potential to create shareholder value. Through this process, we have reviewed whether there were transactions available which could create shareholder value greater than that which would occur through executing the company's operating strategies.
“This review identified a significant opportunity to create value through monetizing certain assets in our slower growth traditional department store businesses. As a result, the Company sold its Proffitt's/McRae's business to Belk for $623 million in July and now has agreed to sell the NDSG business to Bon-Ton for $1.185 billion.”