By  on October 7, 2005

NEW YORK — Goody's Family Clothing said Thursday it reached an agreement with an affiliate of Sun Capital Partners Inc. to be acquired by the private investment firm for $264.3 million.

The agreement, according to Goody's, calls for a cash price of $8 per share. There were 33,039 shares outstanding on Aug. 17 when the retailer posted second-quarter results. The purchase price of $8 per share represents a premium of slightly over 10 percent from Wednesday's close at $7.26.

Robert Goodfriend, chairman and chief executive officer, said in a statement that members of his family, who own 42 percent of the outstanding shares, have agreed to tender their shares in the transaction.

Goody's, the moderately priced family apparel retailer based in Knoxville, Tenn., operates 368 stores in 20 states.

Sun Capital was part of a consortium that bought Mervyn's from Target last year for $1.65 billion. Other consortium partners in the Mervyn's deal included Cerberus Capital Management and Lubert-Adler/Klaff and Partners.

More recently Sun Capital has shown interest in making investments in the retail and apparel industries. One of Sun's funds, Sun Capital Partners Group IV, is part of a consortium that, along with Developers Diversified Realty Corp. and Lubert-Adler Partners, made a non-binding proposal to acquire ShopKo Stores for $26.50 per share. The bid for ShopKo was announced on Monday.

And last week, Sun European Partners, an affiliate of Sun Capital, entered into an exclusive negotiation period with Sara Lee Corp. for the purchase of Sara Lee's branded European intimate apparel businesses. Sara Lee Coutaulds, the U.K.-based division that manufactures private label apparel for retailers, is not part of the potential sale.

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