NEW YORK — The Bon-Ton Stores Inc. said on Monday that it has completed the $1.05 billion cash purchase of Saks’ northern department store group.
The former Saks group has a 142-store base in 12 states, consisting of the Carson Pirie Scott, Younkers, Herberger’s, Bergner’s and Boston Store nameplates. Including those stores, Bon-Ton is the second-largest regional department store retailer in the U.S. with 279 units in 23 states and $3.4 billion in sales for fiscal 2005.
“With the close of this acquisition, Bon-Ton has become a major player in the retail industry,” said Bud Bergren, president and chief executive officer. “We look forward to realizing the potential of this business combination.”
He said the acquisition will enhance shareholder value by providing an expanded and diversified geographic presence and economies of scale that the company believes will drive greater profitability.
Bon-Ton on Monday also issued 10.25 percent senior notes due 2014 in the aggregate principal amount of $510 million to finance the acquisition and the related refinancing of its existing indebtedness. The retailer also entered into a $1 billion senior secured revolving credit facility led by Bank of America N.A. as agent, and a $260 million loan facility with the Bank of America N.A. as lender.
Bon-Ton’s corporate office will remain in York, Pa. The merchandising and marketing functions for the combined operations will operate out of the existing northern store group’s headquarters in Milwaukee. Integration of the two operations is expected to be completed in 18 to 24 months.
This story first appeared in the March 7, 2006 issue of WWD. Subscribe Today.