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JP Morgan Chase, Goldman Provide $90MM in Versa’s Recap of AVENUE

October 30, 2014, 07:11 AM
Filed Under: Retail

Versa Capital Management announced its portfolio company AVENUE Stores has finalized a new capital structure to support AVENUE’s continued growth and provide additional interim returns to its equity holders. AVENUE is a specialty retailer with more than 280 U.S. stores and expanding omni-channel capabilities dedicated to serving the fashion needs of today’s plus-size women. Following the successful recapitalization, Versa, along with management, continues to own 100% of the company’s equity interests.

The financing was provided by affiliates of JP Morgan Chase and Goldman Sachs and includes a $90 million term loan and revolving credit facility that provided a substantial dividend to equity holders while leaving the previously debt-free company with only a modest leverage level and ample liquidity to support AVENUE’s continued growth and expansion.

“We are pleased to have finalized this transaction, as it underscores the significant progress AVENUE has made since its acquisition just over two years ago,” said Gregory L. Segall, CEO of Versa Capital and Chairman of AVENUE. “Working in close partnership with AVENUE’s management team led by CEO Liz Williams, AVENUE has been transformed into a vibrant enterprise achieving substantial growth in revenues, earnings and free cash flow, while accelerating its new store opening program.”

Segall continued: “In light of AVENUE’s strong financial profile and the fact it had no prior borrowings, the Board determined that it would be prudent to capitalize on today’s historically low interest rates and deliver an attractive return to our investors, while ensuring that AVENUE remained well-equipped to fund its ongoing expansion. We look forward to continuing our partnership with Liz and the rest of the management team at AVENUE.”

AVENUE Stores, LLC was represented in the transaction by Sullivan & Cromwell LLP and Stifel, Nicolaus & Company, Incorporated, while the lenders were represented by Milbank, Tweed, Hadley & McCloy LLP.

For over 30 years, AVENUE has been a leader in the fashion industry for plus-size clothing. Today, AVENUE is one of the leading destinations for fashion-minded, value-oriented plus-size women.

Based in Philadelphia, PA, Versa Capital Management, LLC is a private equity investment firm with more than $1.4 billion of assets under management focused on control investments in special situations involving middle market companies where value and performance growth can be achieved through enhanced operational and financial management.

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