CITY OF COMMERCE, Calif.,
Oct. 11, 2011 /PRNewswire/ --
99 Cents Only Stores (NYSE:
NDN) (the "Company") today announced that it has entered into a
definitive agreement to be acquired by affiliates of Ares
Management LLC and Canada Pension Plan Investment Board for
$22.00 per share in cash, in a
transaction with a total equity value of approximately $1.6 billion. Members of the Gold/Schiffer
family have entered into a voting agreement in support of the
transaction and will continue to hold a significant minority
ownership stake. Eric Schiffer (CEO), Jeff Gold (President and COO), and Howard Gold (EVP) will continue in their current
leadership roles at the Company and will serve as directors.
Founder David Gold will serve as Chairman Emeritus.
(Logo:
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The per share price represents a premium of 32% to 99 Cents Only Stores' closing share price on
March 10, 2011, the day prior to
public disclosure by the Company that it had received an
acquisition proposal. Following the receipt by the Company's
Board of Directors of that proposal, the Board formed a special
committee of independent directors (the "Special Committee") to
evaluate the proposal and any other proposals as well as strategic
alternatives available to the Company. The Special Committee
retained independent financial and legal advisors. Following
its evaluation, the Special Committee concluded that the
transaction with Ares Management and CPPIB is fair to and in the
best interests of the Company and its shareholders (other than the
members of the Gold/Schiffer family who are participating in the
acquisition and who have separate advisors). The Board,
acting upon the unanimous recommendation of the Special Committee,
approved the transaction and recommended that the Company's
shareholders vote to approve the transaction.
"Today's announcement is the result of a comprehensive process
in which the Special Committee, with the assistance of its outside
advisors, carefully considered strategic alternatives for our
shareholders," said Marvin Holen,
Chairman of the Special Committee. "In connection with this
process, affiliates of Ares and CPPIB made a definitive offer to
acquire 99 Cents Only Stores, and
this offer was fully negotiated by the Special Committee. The
Special Committee unanimously recommended that our Board approve
this transaction."
"I am pleased to announce this agreement as it delivers
significant value to our shareholders," said Eric Schiffer, CEO. "We have come to know and
respect Ares Management and CPPIB through this process and we
believe they will be excellent partners and help us achieve our
long term goals as a company. We look forward to continuing to
deliver extreme value to our customers and providing a great place
to work for our 99ers."
"We are very pleased to be partnering with the Gold/Schiffer
family and Canada Pension Plan Investment Board in making this
investment in 99 Cents Only Stores,"
said David Kaplan, a Senior Partner
and Founding Member of Ares Management. "We believe that
99 Cents Only Stores is a franchise
company and we look forward to working closely with the Company's
management team and dedicated employees to continue to expand the
business in order to successfully increase the Company's attractive
current market position. We are thrilled to be adding
99 Cents Only Stores to our long
track record of utilizing our financial capital to facilitate
organic growth in the companies in which we invest such as Aspen
Dental, Floor and Decor Outlets of America, General Nutrition
Centers, Maidenform Brands, Samsonite, and Serta & Simmons
Bedding Company."
"We are pleased to be partnering with the Gold/Schiffer family
and Ares in making this investment in 99
Cents Only Stores, which has a strong market position and
attractive store economics in a growing retail sector," said
Andre Bourbonnais, Senior
Vice-President, Private Investments of CPPIB. "This
investment is consistent with our strategy of investing alongside
strong partners in an asset that we believe is well positioned for
the long term and has shown good performance in various economic
environments."
The transaction requires the affirmative vote of holders of a
majority of the Company's outstanding shares in favor of the
transaction, which will be sought at a special meeting of the
shareholders of the Company, and is subject to customary closing
conditions, including the expiration of the waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act. The transaction
is expected to close during the first quarter of calendar 2012.
The Special Committee is composed of Larry Glascott, Marvin
Holen and Peter Woo.
Lazard Freres & Co. LLC acted as financial advisor to the
Special Committee of 99 Cents Only
Stores, and Morrison & Foerster LLP acted as the Special
Committee's legal counsel. Guggenheim Securities, LLC and
Skadden, Arps, Slate, Meagher & Flom LLP acted as advisors to
the Gold/Schiffer family. RBC Capital Markets and BMO Capital
Markets provided committed financing and acted as financial
advisors to Ares Management and CPPIB. Proskauer Rose LLP
acted as legal advisor to the acquirer and Ares Management and
Torys LLP acted as legal advisor to CPPIB. Munger, Tolles
& Olson LLP acted as counsel to the Company.
About 99 Cents Only
Stores
Founded in 1982, 99 Cents Only
Stores® currently operates 289 extreme value retail stores
consisting of 214 stores in California, 35 in Texas, 27 in Arizona, and 13 in Nevada. 99 Cents
Only Stores® emphasizes quality name-brand consumables, priced at
an excellent value, in convenient, attractively merchandised
stores. Over half of the Company's sales come from food and
beverages, including produce, dairy, deli and frozen foods, along
with organic and gourmet foods. The Company's New York Stock
Exchange symbol is NDN.
About Ares Management LLC
Ares Management LLC is a global alternative asset manager and
SEC registered investment adviser with approximately $43 billion of committed capital under management
and approximately 450 employees as of September 30, 2011. The firm is headquartered in
Los Angeles with professionals
also located across the United
States, Europe and
Asia and has the ability to invest
in all levels of a company's capital structure — from senior debt
to common equity. The firm's investment activities are managed by
dedicated teams in its Private Equity, Private Debt and Capital
Markets investment platforms. Ares Management was built upon the
fundamental principle that each platform benefits from being part
of the greater whole. This multi-asset class synergy provides its
professionals with insights into industry trends across the globe,
access to significant deal flow and the ability to assess relative
value.
The Ares Private Equity Group pursues majority or shared-control
investments, principally in middle market companies with strong
business franchises and in situations where its capital can serve
as a catalyst for growth. Ares' senior partners average more than
20 years of experience investing in, controlling, advising, and
restructuring companies.
For additional information, visit www.aresmgmt.com.
About Canada Pension Plan Investment Board
Canada Pension Plan Investment Board is a professional
investment management organization that invests the funds not
needed by the Canada Pension Plan to pay current benefits on behalf
of 17 million Canadian contributors and beneficiaries. In order to
build a diversified portfolio of CPP assets, CPPIB invests in
public equities, private equities, real estate, inflation-linked
bonds, infrastructure and fixed income instruments. Headquartered
in Toronto, with offices in
London and Hong Kong, CPPIB is governed and managed
independently of the Canada Pension Plan and at arm's length from
governments. At June 30, 2011, the
CPP Fund totaled C$153.2 billion. For
more information about CPPIB, please visit www.cppib.ca.
Forward-Looking Statements
Statements that describe the objectives, expectations, plans or
goals of the Company, the buyer or its affiliates are
forward-looking statements, including, without limitation,
statements relating to the completion of the transaction.
There are a number of risks and uncertainties that could
cause actual results or events to differ materially from these
forward-looking statements, including the following: (1) the
Company may be unable to obtain shareholder approval as required
for the transaction; (2) conditions to the closing of the
transaction may not be satisfied; (3) the transaction may involve
unexpected costs, liabilities or delays; (4) the business of the
Company may suffer as a result of uncertainty surrounding the
transaction; (5) the outcome of any legal proceedings related to
the transaction; (6) the Company may be adversely affected by other
economic, business, and/or competitive factors; (7) the occurrence
of any event, change or other circumstances that could give rise to
the termination of the transaction agreement; (8) the ability to
recognize benefits of the transaction; (9) risks that the
transaction disrupts current plans and operations and the potential
difficulties in employee retention as a result of the transaction;
and (10) other risks to consummation of the transaction, including
the risk that the transaction will not be consummated within the
expected time period or at all. If the transaction is
consummated, our public shareholders will cease to have any equity
interest in the Company and will have no right to participate in
its earnings and future growth. Additional factors that may affect
the future results of the Company are set forth in its filings with
the Securities and Exchange Commission (the "SEC"), including its
recent filings on Forms 10-K, 10-Q and 8-K, including, but not
limited to, those described in the Company's Annual Report on Form
10-K for the fiscal year ended April 2,
2011, and the Quarterly Report on Form 10-Q for the
quarterly period ended July 2,
2011.
The shareholders of the Company and other readers are cautioned
not to put undue reliance on any forward-looking statements, which
reflect our current beliefs and are based on information available
to us as of the date a forward-looking statement is made. We
undertake no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events
or otherwise. In the event we do update any forward-looking
statements, no inference should be made that we will make
additional updates with respect to that statement, related matters,
or any other forward-looking statements. Any corrections or
revisions and other important information regarding risks and
factors that could cause actual results to differ materially from
our forward-looking statements may appear in the Company's SEC
filings and reports, which are accessible at www.sec.gov, and which
you are advised to consult.
Additional Information
In connection with the proposed transaction, the Company will
file a proxy statement and other materials with the SEC. THE
COMPANY URGES INVESTORS TO READ THE PROXY STATEMENT AND THESE OTHER
MATERIALS CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE PROPOSED
TRANSACTION. Investors may obtain free copies of the proxy
statement (when available) as well as other filed documents
containing information about the Company at http://www.sec.gov, the
SEC's free internet site.
The Company and its executive officers and directors may be
deemed, under SEC rules, to be participants in the solicitation of
proxies from the Company's shareholders with respect to the
proposed transaction. Information regarding the executive officers
and directors of the Company is included in the Definitive Proxy
Statement on Schedule 14A filed with the SEC on July 27, 2011 with respect to the 2011 Annual
Meeting of Shareholders of the Company. More detailed
information regarding the identity of the potential participants,
and their direct or indirect interests, by security holdings or
otherwise, will be set forth in the proxy statement and other
materials to be filed with SEC in connection with the proposed
transaction.
SOURCE 99 Cents Only Stores