Destination Maternity To Merge With France's Orchestra Prémaman In Stock Deal

(RTTNews) - Destination Maternity Corp. (DEST) Tuesday announced that it has entered into a definitive agreement to merge with France's Orchestra Prémaman S.A. The deal is expected to create a major provider of maternity apparel, childrenswear and baby hard goods.

Under the terms of the Agreement, Destination Maternity shareholders will receive 0.5150 of an Orchestra Prémaman ordinary share, in the form of American Depositary Shares, for each share of Destination common stock they own.

The implied offer price of $7.05 per share is based on Orchestra's closing stock price, representing a 34 percent premium to its unaffected stock price of $5.26 on May 31, 2016, prior to Destination filing its 8-K filing on June 1, 2016, announcing Destination change-in-control compensation arrangements.

On a pro forma basis, following the closing of the transaction, Destination shareholders will own approximately 28 percent of the combined company, and Orchestra shareholders will own approximately 72 percent.

The strategic transaction was unanimously approved by the Boards of Directors of both companies.

The stock-for-stock transaction is expected to be tax-free to shareholders. The merger is subject to customary closing conditions, including receipt of the required approval of both Destination and Orchestra shareholders. The parties currently expect the transaction to close mid-2017.

The combined company is expected to have pro forma revenues of approximately $1.1 billion and combined Adjusted EBITDA of $76 million.

The combination is expected to generate enhanced cash flow and maintain a strong balance sheet to support growth at both companies.

Following the closing, the group will be organized geographically, with a North America business unit and a Rest of World business unit.

Upon completion of the merger, the company, operated under the Orchestra name, will maintain its corporate headquarters located in Montpellier, France. Destination will maintain its headquarters in Moorestown, N.J. and its distribution facility in Florence, N.J.