Kellwood Accepts Merger With Sun Capital

Friday, February 15, 2008

Kellwood Co.—the St. Louis–based manufacturer of branded and private-label apparel, including the California-based labels Vince, David Meister and XOXO—announced it has entered into a merger agreement with Sun Capital Securities Group.

The $1.6 billion apparel maker, which had been resisting the private-equity firm’s takeover offer of $542 million, reversed course and recommended that stockholders accept Sun Capital’s $21-per-share offer.

“The board considered a number of factors in making its decision, including its determination that the $21 price being offered is fair, the absence of superior bids and the company’s belief that a majority of the stockholders intend to tender their shares,” Kellwood said in a statement.

Since September, Kellwood twice rebuffed Boca Raton, Fla.–based Sun Capital’s offer but changed its mind when it determined a majority of its shareholders was likely to accept the offer.

To ease the merger and allow the deal to close on Feb. 12, Kellwood also announced the termination of a $60 million debt tender offer it made in January. The merger will give Sun Capital majority ownership of Kellwood and transfer control of Kellwood’s board of directors to Sun Capital.

“As a strong, private company, Kellwood will continue to execute on its strategic priorities to position the company as a brand-focused marketing enterprise,” said Robert C. Skinner Jr., Kellwood’s chairman, president and chief executive officer.

Kellwood’s stable of more than 20 brands includes high-end shoemaker Hollywould; streetwear brands Phat Farm and Baby Phat; and designer brands Calvin Klein and O Oscar, an Oscar de la Renta company. —Erin Barajas