Birmingham, Ala., Saks Inc. agreed to sell its Northern Department Store Group (NDSG) to The Bon-Ton Stores, Inc. for $1.1 billion in cash plus the assumption of approximately $85 million of liabilities, including approximately $35 million in capitalized leases.
York, Pa.-based Bon-Ton will acquire 31 Carson Pirie Scott stores, 14 Bergner's stores, 10 Boston Store units, 40 Herberger's stores, and 47 Younkers stores—a total of 142 NDSG units. The 142 stores being sold represent 15.1 million gross sq. ft. and are located throughout 12 Midwestern and Great Plains states. NDSG generated 2004 revenues of approximately $2.2 billion.
"The acquisition of Northern Department Store Group significantly broadens Bon-Ton's reach and presence, and represents a logical next step for us following our successful integration of Elder-Beerman," said Bud Bergren, president and CEO of Bon-Ton. "The transaction solidifies and strengthens our position in the Midwest and extends our footprint into the Great Plains states."
The transaction is expected to be completed early in the first fiscal quarter of 2006. Closing is subject to certain conditions, including Bon-Ton's financing for the transaction, the expiration or termination of all waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act, and various other conditions. Bank of America, N.A. has executed a commitment letter with Bon-Ton to provide for the financing of the transaction.
Bon-Ton has indicated plans to retain the various store nameplates of the acquired stores.
Back in July, Saks sold its Proffitt's/McRae's business to Belk for $623 million.