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Sycamore Partners in talks to buy Men’s Wearhouse discount chain K&G

4 Dec 2013

K&GUS private equity firm Sycamore Partners is reportedly in advanced talks to buy the discount chain store arm of Men’s Wearhouse.

Reuters reported the deal for K&G citing four people familiar with the matter, but said they did not know how much Sycamore had offered for the business.

K&G, which sells discounted goods from brands including Calvin Klein, represented 15 per cent of Men’s Wearhouse’s net sales of $2.5bn in the 2012 financial year.

In October Men’s Wearhouse rejected an “opportunistic and inadequate” private equity-backed $2.3bn buyout offer from peer Jos. A. Bank Clothiers.

Jos A. Bank planned to fund its non-binding $48 per share offer with $300m in debt, cash and equity provided by private equity firm Golden Gate Capital.

Men’s Wearhouse said the offer, which valued the group at more than eight times its EBITDA, undervalued its “strong prospects for continued growth and value creation.”

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