ESL Investments, Inc. agreed to acquire substantially all of the assets of Sears Holdings Corporation (OTCPK:SHLD.Q) for $5.2 billion.
January 15, 2019
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ESL Investments Inc. was declared as the winning bidder to acquire substantially all of the assets of Sears Holdings Corporation (OTCPK:SHLD.Q) for $5.2 billion on January 16, 2019. ESL Investments, Inc. entered into an asset purchase agreement to acquire substantially all of the assets of Sears Holdings Corporation (OTCPK:SHLD.Q) on January 17, 2019. The consideration comprises of $850 million in cash to be funded with the proceeds of a new $1.3 billion ABL Commitment and among ESL Investments, Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith, a credit bid of approximately $1.3 billion the roll-over of approximately $621 million of senior indebtedness and other terms included in the agreement. ESL will acquire substantially all of the Sears' assets, including the "Go Forward Stores" on a going-concern basis. The purchase agreement provides that ESL Investments Inc. will provide offers of ongoing employment to approximately 45,000 employees of the Company and its subsidiaries. The Bankruptcy Court hearing to approve the sale is scheduled for February 4, 2019. The transaction will be terminated if the Bankruptcy Court has not approved it before February 8, 2019.
As of February 12, 2019, Edward S. Lampert of Sears Holdings resigned as a member of the Board of Directors. The transaction is subject to closing conditions including antitrust approvals and the Sears Holdings owning at least $1,657 million of certain inventory and receivables and there being no more than $850 million outstanding under the DIP Credit Agreement and no more than $350 million outstanding under the Junior DIP Term Loan, exclusive of any accrued and unpaid interest there under. As on February 7, 2019, the transaction received approval from the bankruptcy court. The transaction is expected to close on or before the outside date of February 19, 2019.
Ray C. Schrock, P.C., Ellen J. Odoner, Gavin Westerman and Sunny Singh of Weil, Gotshal & Manges LLP served as legal advisor, M-III Partners LP as restructuring advisor and Lazard Frères & Co. LLC as financial advisor to Sears on the transaction. Christopher E. Austin, Benet J. O’Reilly and Sean A. O’Neal of Cleary Gottlieb Steen & Hamilton LLP acted as legal advisors to ESL Investments in the transaction. Moelis & Company LLC acted as financial advisor to ESL Investments in the transaction. Evercore acted as financial advisor to Sears Holdings Corporation. Paul Basta, Karla Booth, Robert Britton, Susanna Buergel, Lewis Clayton, Kelley Cornish, Jonathan Hurwitz, Meredith Kane, Karen King and Stephen Koo of Paul Weiss Rifkind Wharton & Garrison acted as legal advisor to Sears Holdings Corporation.
Sears Holdings Corp is a United States-based company. The Company is an integrated retailer with approximately 766 full-line and specialty retail stores. It operates through two segments: Kmart and Sears Domestic. Its Kmart segment offers a range of products across various merchandise categories, including consumer electronics, seasonal merchandise, outdoor living, toys, lawn and garden equipment, food and consumables and apparel, including products sold under labels, such as Craftsman, Jaclyn Smith, Adam Levine, Joe Boxer, Basic Editions and Sears branded products (such as Kenmore and DieHard) and services. The Companyâs Sears Domestic segment offers products include Kenmore, DieHard, WallyHome, Bongo, Covington, Simply Styled, Everlast, Metaphor, Roebuck & Co., Outdoor Life and Structure brand merchandise, and other brand merchandise, such as Craftsman, Roadhandler and Levi's. It also offers Shop Your Way, a member-based social shopping platform.