Specialty retailer Charlotte Russe Holding Inc. said Monday that it had agreed to be acquired for about $380 million by investment funds managed by a private equity firm.
Advent International Corp. agreed to pay $17.50 a share in cash to take over the San Diego chain, which announced in March that it was formally putting itself up for sale after a difficult holiday season.
The transaction represents a 255% return for investors since Jan. 21, when the retailer announced it was exploring options to create shareholder value, and a 26.9% return since Friday, the company said.
"Advent brings in-depth sector knowledge of the rapidly changing retail landscape and an exceptional track record of supporting growth," John Goodman, chief executive of Charlotte Russe, said in a statement.
"I am confident that this partnership will create opportunities for our employees and positions us well for the future."
Founded in 1975, Charlotte Russe is a mall-based retailer of value-priced apparel and accessories for young women. The chain operates 501 stores in 45 states and Puerto Rico.
Last month Charlotte Russe reported that profit in its fiscal third quarter was $6.3 million, or 29 cents a share, a 4.5% decline from $6.6 million, or 31 cents, for the same quarter in 2008. Sales at stores open at least a year fell 3.6%.
Despite the difficult economic environment, Charlotte Russe is in good financial condition and has improved its business in the last year, said Samantha Panella, an analyst at Raymond James & Associates.
"It appears Advent is getting a reasonable deal on this situation," she said. The sale "had nothing to do with a threat of bankruptcy."
Shares of Charlotte Russe rose $3.57, or 25.9%, to $17.36.