Golden Gate Capital won the bankruptcy auction for the assets of Eddie Bauer, agreeing to pay $286 million in cash. That was enough to beat the Stalking Horse bid of $202 million put forth by CCMP Capital.
The high offer indicates that Golden Gate sees a lot of value in the brand and its operations. In a press release, Eddie Bauer said that "The Golden Gate offer will maintain the substantial majority of Eddie Bauer's stores and employees in a newly formed going concern company. Pursuant to the purchase agreement Eddie Bauer gift cards will be honored in the ordinary course of business."
Without the huge debt load that drove the company into bankruptcy, Golden Gate is betting that it can turn Eddie Bauer around and make it a meaningful part of the fashion industry again. Interestingly, this is not the first time Golden Gate has been involved with the company. In late 2006, Golden Gate teamed up with Sun Capital to offer $286 million in cash on top of $328 million in assumed debt -- but that offer was rejected by the companies shareholders, who are now kicking themselves. In effect, Golden Gate waited a few years and was able to get the company for the same price but without the encumbrance of a crushing debt load.
