Gymboree agrees to $1.8-billion buyout

Gymboree Corp., the San Francisco-based children’s clothing retailer, agreed to be bought by Bain Capital for about $1.8 billion.

The acquisition price is $65.40 a share, the companies said Monday. That’s 57% more than Gymboree’s closing price Sept. 30, when reports of a takeover surfaced. Gymboree may seek acquisition proposals from third parties through Nov. 20, according to the statement.

Gymboree shares gained $11.88, or 22%, to $64.83 on Monday.

The purchase is the largest leveraged buyout in the retail apparel sector in the last three years. It gives Boston-based Bain more than 1,000 stores in countries including Canada and Australia. Gymboree, whose sales growth has slowed for three straight years, also operates Janie and Jack shops and Crazy 8 stores in the U.S.

“It’s an excellent deal for Gymboree shareholders with a valuation well above what many were expecting,” said Lee Giordano, an analyst at Imperial Capital in New York.

Gymboree’s annual net income rose to $101.9 million in the year that ended Jan. 30, more than triple its profit from 2006. Earnings have grown for five consecutive years.

“Children’s apparel is more predictable than teen apparel because it’s less influenced by fashion, and in recessionary times, parents tend to spend more on their kids than they do on themselves, so it’s resilient,” Giordano said.