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DSW closes initial investment in Canada's Town Shoes.

M2 EQUITYBITES-May 13, 2014-DSW closes initial investment in Canada's Town Shoes

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13 May 2014 - US footwear and accessories retailer DSW Inc (NYSE:DSW) said it had closed its initial buy of 49.2% in Canadian sector player Town Shoes Ltd for CAD75.5m (USD69m/EUR50m) in cash.

DSW bought the stake in Town Shoes from clients of Canada's Alberta Investment Management Corporation (AIMCo) and other minority shareholders as part of its initial investment in the company.

DSW has an option to buy the remaining interest in Town Shoes from other stockholders, including Canadian private equity firm Callisto Capital LP, after four years at a pre-determined EBITDA multiple while Callisto is entitled to put the balance of the company to DSW after three years at a pre-determined EBITDA multiple, the buyer said in mid-April when the deal was announced.

The interest DSW already acquired gives it 50% voting control at Town Shoes and a board representation equal to that of Callisto, the company added.

The investment provides DSW with the opportunity to enter the Canadian market through Town Shoes' platform, CEO Mike MacDonald said.

Town Shoes operates 182 locations across Canada. The company's revenue for the year through January 2014 reached CAD291m, the buyer has said.

Peter J Solomon Company consulted DSW on the financial aspects of the deal.

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Publication:M2 EquityBites (EQB)
Geographic Code:1CANA
Date:May 13, 2014
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