Item 2.01 Completion of Acquisition or Disposition of Assets.
As previously reported on October 10, 2018, DSW Inc. (the “Company”) announced the execution of a binding securities purchase agreement, dated as of October 10, 2018 (the “Purchase Agreement”), by and among DSW Shoe Warehouse, Inc., a wholly owned subsidiary of the Company (“DSW HoldCo”),ABG-Camuto, LLC(“ABG-Camuto” and, together with DSW HoldCo, the “Buyers”), Camuto Group LLC and Camuto Consulting, Inc. (together, “Sellers”), the trusts and the estate of the late Vincent Camuto, which together own all of the equity interests in Sellers (collectively, the “Camuto Owners”), Clear Thinking Group LLC, in the person of Stuart H. Kessler, solely in its capacity as representative for Sellers, and, solely with respect to specified provisions, the Company and Authentic Brands Group LLC (“ABG”).
On November 5, 2018, pursuant to the Purchase Agreement, the Buyers acquired substantially all of the business of Sellers, other than the operations of Bernard Chaus Inc. (the “Acquisition”). The aggregate purchase price payable for the Acquisition pursuant to the Purchase Agreement, after customary adjustments, was approximately $323 million. Pursuant to the Purchase Agreement, $25 million was deposited into escrow accounts maintained by an escrow agent to fund certain post-closing purchase price adjustments and future indemnity claims under the Purchase Agreement. In the Acquisition, DSW HoldCo acquired Sellers’ operating business for a purchase price of approximately $181 million, after customary adjustments, andABG-Camuto acquired the intellectual property of the Camuto brands for a purchase price of approximately $143 million (40% of which was funded by the Company, through its investment inABG-Camuto, a joint venture with an affiliate of ABG).
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under anOff-Balance Sheet Arrangement of a Registrant.
As previously reported on October 10, 2018, the Company and certain of its subsidiaries entered into a second amendment (the “Amendment”) to the credit agreement, dated as of August 25, 2017 (the “Credit Agreement”), among the Company, certain of the Company’s Canadian subsidiaries that may become borrowers thereunder, the Company’s domestic subsidiaries (other than certain subsidiaries formed and/or acquired in connection with the Acquisition) as guarantors, the lenders party thereto, and PNC Bank, National Association as administrative agent for the lenders (the “Agent”).
Upon the closing of the Acquisition, pursuant to the terms of the Amendment, the commitments in respect of the unsecured revolving credit facility governed by the Credit Agreement were increased by $100 million to a total of $400 million (the “New Commitments”). The New Commitments have the same terms as the existing commitments under the Credit Agreement (as modified by the Amendment). The Company’s obligations arising under the New Commitments are guaranteed by the same subsidiaries of the Company that guarantee the Company’s obligations arising under existing commitments under the Credit Agreement. Additionally, certain subsidiaries formed and/or acquired in connection with the Acquisition shall be required to become guarantors under the Credit Agreement within thirty days following the closing of the Acquisition.
Item 8.01 Other Events.
On November 6, 2018, the Company issued a press release announcing the completion of the Acquisition, which is attached as Exhibit 99.1 to this Current Report on Form8-K.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
Financial statements, to the extent required by this Item 9.01, will be filed by amendment to this Current Report on Form8-K no later than 71 days following the date that this Current Report on Form8-K is required to be filed.
(b) Pro Forma Financial Information.
Financial statements, to the extent required by this Item 9.01, will be filed by amendment to this Current Report on Form8-K no later than 71 days following the date that this Current Report on Form8-K is required to be filed.
(d) Exhibits
