Stein Mart Enters into Transaction to Become a Private Company
01 February 2020 - 1:20AM
Stein Mart, Inc. (NASDAQ: SMRT) (“Stein Mart” or the “Company”)
today announced it has entered into a definitive merger agreement
under which an affiliate of Kingswood Capital Management, L.P.
(“Kingswood”) will acquire all of the outstanding common stock of
Stein Mart not already beneficially owned by affiliates of Jay
Stein, Stein Mart’s former CEO and current Chairman of the Board of
Directors, and related investors for $0.90 per share in cash. Upon
closing, Stein Mart will become a privately held company and Stein
Mart common stock will no longer be listed or traded on any public
stock market.
The purchase price represents a premium of
approximately 38% to Stein Mart’s closing stock price on January
30, 2020, the last trading day prior to this announcement.
The transaction was unanimously approved by the
Stein Mart Board of Directors (other than Mr. Stein), acting on the
unanimous recommendation of a Special Committee of independent
directors that was granted full authority to conduct a
comprehensive strategic review and evaluate, and if warranted,
negotiate an acquisition proposal.
“The Special Committee and its advisors
conducted a thorough and independent process to review the
Company’s strategic alternatives and identify a transaction that
would maximize shareholder value. We believe that this transaction
is in the best interest of all Stein Mart stakeholders, including
our many loyal employees,” said Richard L. Sisisky, Stein Mart
Board member and Chairman of the Special Committee.
The transaction will be financed by debt
provided by Wells Fargo Bank, National Association and Pathlight
Capital LP and by equity provided by affiliates of Kingswood.
As part of the transaction, an entity managed by Jay Stein will
contribute its equity and, following the closing of the merger,
will indirectly own one-third of Stein Mart after the
closing.
The transaction, which is expected to close in
the first half of calendar year 2020, is subject to approval by
Stein Mart shareholders and the satisfaction of other customary
closing conditions. The Stein Mart Board of Directors recommends
that Stein Mart’s shareholders vote to adopt and approve the merger
agreement.
Stein Mart will file a Current Report on Form
8-K with the Securities and Exchange Commission (SEC), which will
more fully describe the terms and conditions of the merger
agreement and the proposed transaction.
Advisors
PJ SOLOMON is serving as financial advisor to
the Special Committee, Foley & Lardner LLP is serving as the
Special Committee’s legal counsel, and Kingsdale Advisors is
serving as the Company’s proxy solicitor. Goodwin Procter LLP is
serving as legal counsel to Kingswood and Latham & Watkins LLP
is serving as legal advisor to Jay Stein.
About Stein Mart
Stein Mart, Inc. is a national specialty
off-price retailer offering designer and name-brand fashion apparel
for him, for her and now for Kids!, home décor, accessories and
shoes at everyday discount prices. Stein Mart provides real value
that customers love every day. The company operates 283 stores
across 30 states. For more information, please visit
www.SteinMart.com.
Safe Harbor Statement
Certain statements in this press release
regarding the merger agreement and the proposed merger constitute
“forward-looking statements” under the federal securities laws.
These forward-looking statements are intended to be covered by the
safe harbor provisions created by the Private Securities Litigation
Reform Act of 1995. When we use words such as “anticipate,”
“intend,” “plan,” “believe,” “estimate,” “expect,” or similar
expressions, we do so to identify forward-looking statements.
Forward-looking statements are based on current expectations that
involve assumptions that are difficult or impossible to predict
accurately and many of which are beyond our control. Actual results
may differ materially from those expressed or implied in these
statements as a result of significant risks and uncertainties,
including, but not limited to, the occurrence of any event, change
or other circumstances that could give rise to the termination of
the merger agreement, the inability to obtain the requisite
shareholder approval for the proposed merger or the failure to
satisfy other conditions to completion of the proposed merger,
risks that the proposed transaction disrupts current plans and
operations, the ability to recognize the benefits of the merger,
and the amount of the costs, fees, and expenses and charges related
to the merger. Additional information about other risks and
uncertainties that may cause actual results to differ materially
from those projected, is contained in the Company’s filings with
the SEC, including the Company’s Annual Report on Form 10-K and the
Company’s quarterly reports on Form 10-Q. The statements in this
press release speak only as of the date of hereof and we undertake
no obligation to update or revise any forward-looking statement,
whether as a result of new information, future developments or
otherwise, except as may be required by law.
Additional Information and Certain
Information Regarding Participants
In connection with the proposed transaction, the
Company will file with the SEC a proxy statement on Schedule 14A
and may file other documents with the SEC regarding the proposed
transaction. This press release is not a substitute for the proxy
statement or any other document that the Company may file with the
SEC. INVESTORS IN, AND SECURITY HOLDERS OF, THE COMPANY ARE URGED
TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT
ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS
OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY
BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and
security holders may obtain free copies of the proxy statement
(when available) and other documents filed with the SEC by the
Company through the web site maintained by the SEC at www.sec.gov
or by contacting Kingsdale Advisors by telephone at 1.866.581.1479
toll-free in North America (+1.416.867.2272 for collect calls
outside of North America) or by e-mail at
contactus@kingsdaleadvisors.com.
Certain Participant
Information
The Company and its directors and executive
officers may be deemed to be participants in the solicitation of
proxies in connection with the proposed transaction. Information
regarding the Company’s directors and executive officers, including
a description of their direct interests, by security holdings or
otherwise, in the Company is contained in the Company’s Definitive
Annual Meeting Proxy Statement filed with the SEC on May 7, 2019.
You may obtain a free copy of this document as described in the
preceding paragraph. Investors may obtain additional information
regarding the direct and indirect interests of the Company and its
directors and executive officers in the proposed transaction by
reading the proxy statement and other public filings referred to
above.
For more information:Linda L. TasseffDirector, Investor
Relations(904) 858-2639ltasseff@steinmart.com
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