NEW YORK — Burlington Coat Factory Warehouse Corp., which has 367 stores in 42 states, has signed an agreement to be acquired by Bain Capital Partners for $2.06 billion.
The retailer said on Wednesday that, under the terms of the deal, Bain would acquire all of the outstanding shares of Burlington at $45.50 a share in cash.
“Burlington Coat Factory is a well-managed retail business with a strong consumer following, high-quality product offerings and good growth prospects,” Jordan Hitch, managing director at Bain, said in a statement. The private equity firm is “delighted to have the opportunity to partner with the experienced management team to build on the company’s track record of success in merchandising and store operations and to continue to grow the store portfolio.”
Bain Capital declined to comment further on the acquisition.
“They seem to love the company and they are going to use the company’s management to run the business, which is something I am very happy about,” Monroe Milstein, chairman, president and chief executive officer of Burlington Coat Factory, said in an interview. Five bidders submitted proposals to Goldman Sachs, Milstein said, and he rejected Bain’s initial offer.
Milstein and two of his sons, Stephen and Andrew, who managed merchandising, are exiting the firm.
Burlington Coat Factory was put on the auction block in June. Founded by the Milstein family in 1972, the retail chain has expanded from a single store selling coats to a multidepartment retail chain. It sells branded apparel at low prices across many product divisions, as well as family footwear, home decor and gifts.
Burlington’s board has voted in favor of the acquisition, which is subject to approval by the company’s shareholders and regulatory and governmental agencies. Bain already has obtained commitments from members of the Milstein family, which represents 62 percent of the current shares outstanding.
Oppenheimer and Co. analyst Bernard Sosnick in a research note Wednesday said Burlington “has performed well in recent quarters, posting strong same-store sales gains and profit improvement.”
The analyst noted that the decision to sell “appears to have been primarily a matter of estate planning and a means for younger members of the Milstein family and key employees to cash out of the business.”
Apollo Management and Texas Pacific Group were among the private equity firms that looked at Burlington. The retailer considered buying Mervyns when Target put the division up for sale.