United States Shoe Corp. announced Monday that it will sell its footwear division, its name and its Cincinnati headquarters to a management-led group for $422.5 million in cash.
The purchase excludes U.S. Shoe’s Cincinnati-based LensCrafters division, which operates retail eyeglass stores, and the women’s apparel retail division, based in Enfield, Conn.
Key executives of U.S. Shoe’s footwear division, including Howard Platt, a company executive vice president who is president of the footwear division, are leaders in the purchasing group, U.S. Shoe said.
500 Retail Stores
The deal involves its major footwear distribution center in Cincinnati. U.S. Shoe said it will surrender its name to the new company and choose another name more suited to its remaining businesses.
The division makes, imports and sells footwear and operates about 500 retail stores. It sells boots through its Texas Boot and Wrangler Boot divisions and markets women’s footwear lines Amalfi, Bandolino, Calvin Klein, Capezio, Cobbie, David Evins, Easy Spirit, Evan Picone, Garolini, Innovations, Joyce, Liz Claiborne, Pappagallo, Red Cross Shoes and Selby.
The transaction is to be concluded within 90 days. U.S. Shoe’s board of directors said it plans to use some of the proceeds of the sale to raise the dividend on the stock to $1 this year from 46 cents.
The company said it expects that the net proceeds will total $390 million, after taxes and expenses, and is subject to possible adjustments of the purchase price before the transaction is closed.
Up to $50 million of the proceeds will be used to pay off long-term debts, U.S. Shoe officials said.
Merrill Lynch Capital Partners Inc., an affiliate of Merrill Lynch Capital Markets, is leading the investment group and has provided commitments for $160 million of equity and subordinated debt financing for the transaction, U.S. Shoe said.
Potential for Growth
Philip G. Barach, chairman and chief executive of U.S. Shoe, said the sale results from an overall review the company announced last August to explore ways it could increase corporate value to the shareholders.
“As part of this process, approximately 80 parties worldwide were contacted in an effort to solicit offers for all of U.S. Shoe or for any of its businesses,” he said.
Barach said no prospective buyer wanted to acquire all of U.S. Shoe or made an acceptable offer for the women’s apparel division. Several bidders made offers for the LensCrafters division, but it was retained in part because of its strong potential for growth, he said.