Sears Holdings Corporation Recapitalizes its Orchard Supply Hardware Business
10.12.05
This is only gets display when printing
Simpson Thacher is representing Sears Holdings Corporation in the $463.7 million recapitalization of its indirect subsidiary, Orchard Supply Hardware Stores Corporation. Orchard, which is headquartered in San Jose, California, is a leading chain of 84 hardware and garden retail stores located throughout California. Sears has agreed to sell 19.9% of the outstanding stock of Orchard to an affiliate of Ares Management LLC for $58.7 million, and has granted Ares a three-year option to purchase an additional 30.2% of Orchard’s stock for $126.8 million. In connection with Ares’ investment, Orchard is expected to incur $405 million in debt by entering into an asset-based revolving credit facility, a collateralized mortgage-backed real property facility and by issuing senior notes. The equity and debt financing will be used to pay a dividend of approximately $450 million to Sears.
The Simpson Thacher team includes Tom Wuchenich, Eric Novak, Jason McFall and Atif Azher (Corporate - Los Angeles); Charlie Rappaport and Nancy Mehlman (Tax); Kara Fricke and Ari Stavsky (Real Estate); Ken Edgar and Frances Adkins (Employee Benefits); Kerry Konrad and Kirstie Howard (IP); Mike Isby (Environmental); and Fagie Hartman and Jackie Rosenblum (Labor). Valuable assistance was provided by summer associates Sylvia Park and Vijay Sekhon and by paralegals Anup Sheth and Gary Duncan.
The asset-based revolving credit facility will be handled by Marissa Wesely and Jonathan Wry and the mortgage-backed real property facility will be handled by Scott Kobak and Erwin Dweck. The senior note financing will be handled in Los Angeles by Tom Wuchenich, Gil Strauss, Jason McFall and Jeff Joseph.