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Gymboree - Welcome to the World of Leverage

|Includes: Gymboree Corp. (GYMB)

On the wire:

 

 

Gymboree Corp., the children’s clothing retailer being taken private by Bain Capital LLC, is seeking $1.47 billion of loans to pay for its leveraged buyout.

Credit Suisse Group AG and Morgan Stanley agreed to provide a $720 million term loan maturing in seven years and a one-year, $520 million senior unsecured bridge facility with an increasing interest rate, according to a commitment letter Gymboree attached today to a regulatory filing. Bank of America Corp. is arranging a $225 million asset-based revolving credit line due in five years as part of the financing package.

Bain agreed to purchase the San Francisco-based retailer for $65.40 a share, according to an Oct. 11 statement, paying a 57 percent premium. That’s the biggest retail-apparel leveraged buyout in three years, according to data compiled by Bloomberg. The Boston-based private-equity firm will fund about 70 percent of the $1.8 billion acquisition with debt, the filing shows.

 

Hey Gymboree, welcome to the world of crap balance sheets.  Hope it works out for you as thus far leveraged retail buyouts have been miserable failures.

Disclosure: no position

Disclosure: no position