Ares Management and Canada Pension Plan Investment Board (CPPIB) have entered into an agreement to acquire Neiman Marcus Group from a group of investors led by TPG and Warburg Pincus for a purchase price of $6 billion. The company’s management will retain a minority stake. The transaction is expected to close in the fourth quarter of 2013.
“We are delighted to join with CPPIB as a long-term investor in Neiman Marcus Group, a leading luxury retailer with global brand recognition that attracts shoppers from all over the world. We share a common vision with the company’s management team, led by its highly respected Chief Executive Officer Karen Katz, and together, we plan on investing meaningful capital into the business to ensure Neiman’s long-term position as the unparalleled leader in luxury retail,” said David Kaplan, Senior Partner and Co-Head of the Private Equity Group of Ares.
Neiman Marcus Group is one of the largest US luxury retailers, comprised of 79 stores totaling more than 6.5 million gross square feet. The company operates 41 Neiman Marcus Stores, two Bergdorf Goodman locations in Manhattan and 36 Last Call outlet centers. Its online retailing division operates under the Neiman Marcus, Bergdorf Goodman, Last Call and Horchow brand names. Neiman Marcus is based in Dallas (www.neimanmarcusgroup.com).
“This is an excellent opportunity to invest in a leading omni-channel luxury retailer, operating two of the most iconic retail brands in the US,” said André Bourbonnais, Senior Vice-President, Private Investments, CPPIB. “We believe the company’s strong market position, combined with an expected increase in US luxury goods spending, provide attractive opportunities for future growth. We are excited to partner once again with Ares, a like-minded, long-term partner of ours.”
Credit Suisse acted as financial advisor to Neiman Marcus Group, and RBC Capital Markets and Deutsche Bank Securities acted as financial advisors to Ares and CPPIB, all of which provided committed debt financing in connection with the transaction.
Ares Management has $66 billion in capital under management and invests in private equity, leveraged loans, high-yield bonds, distressed debt and private debt. The firm has approximately 700 employees and is headquartered in Los Angeles with offices in New York, London, Chicago, and Atlanta (www.aresmgmt.com).
The Canada Pension Plan Investment Board (CPPIB) invests in public equities, private equities, real estate, inflation-linked bonds, infrastructure and fixed income instruments. The board is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. The CPPIB is headquartered in Toronto, with offices in London and Hong Kong (www.cppib.ca).
© 2013 PEPD • Private Equity’s Leading News Magazine • 9-10-13