Early Monday morning, trading was halted on Gymboree (GYMB) after an announcement that Bain Capital Partners would acquire the children's clothing company. Reportedly, the definitive agreement calls for Bain to pay $65.40 per share for Gymboree, or $1.8 billion.
According to the terms of the agreement, Gymboree stockholders will receive $65.40 cash for each outstanding share of Gymboree common stock owned. This price is a 57.4% premium to Gymboree's share price on September 30, 2010 -- the date that takeover rumors began. And the $65.40 is a 23.5% premium over Friday's closing price of $52.95.
Gymboree chairman Matthew McCauley stated that the company is "pleased to announce this transaction as it delivers significant value to our stockholders." McCauley added, "Bain Capital is a world-class asset management firm with substantial resources and investment experience in the retail industry, and we believe they will be a great partner as we go forward as a private company." Bain Capital echoed the sentiment, noting that "Gymboree is a terrific company with incredible brand strength and a large population of extremely satisfied customers."
This purchase is a good move by Bain Capital. Children's clothing is a niche that always needs to be filled, and Gymboree boasts quality at low prices. This purchase should add nicely to Bain's portfolio.