New York and Fort Meyers, FL—Sycamore Partners, the private equity firm, is purportedly in advanced talks to add Chico’s FAS to its fashion array that already includes Talbots, Jones New York, Hot Topic and Aeropostale among others.
According to The Wall Street Journal today, Sycamore has been making the rounds looking for financing to buyout Chico’s, a signal that a deal may be imminent.
If true, the deal would be in the range of $3 billion since Chico’s had a market capitalization of $2.65 billion at Tuesday’s close, meaning that with a typical takeover premium, the company could be valued at more than $3 billion, making it the largest acquisition so far this year.
Large leveraged buyouts of public companies such as Chico’s have been rare since valuations tend to be far above that private equity firms are looking for. Last year, there were just $23 billion in private-equity buyouts of public companies in the U.S., according to Dealogic.
Chico’s FAS, which includes the retail brands Chico’s, White House|Black Market, Soma, and Boston Proper (about 1,550 stores) posted third quarter income of $26.46 million, or 17 sends a share, in line with analysts’ estimates. Net sales were up 2% to $665.57 million.
Besides its high profile move to take Jones Group private last year in a $1.2 billion deal, Sycamore Partners was supposedly in talks to buyout Express Inc., a deal that failed after Sycamore couldn’t find acceptable financing.