Filed under: Deals, Management
With the pain of the real estate plunge, Restoration Hardware (NASDAQ: RSTO) has had a hard time (the company is a specialty retailer of bath ware, furniture and so on). But is it really a good time to sell out?
Well, the company’s management thinks so. Late last week, Restoration Hardware announced a going-private transaction for $267 million or $6.70 per share. The buyer is Catterton Partners, which has quite a bit of experience with retail deals.
The premium comes to about 150%, which is nothing to sneer at. Yet, keep in mind that a variety of institutional investors are keeping their shares (yes, they are betting there could be a nice turnaround).
In fact, Restoration Hardware has already been making some restructuring moves (such as slicing jobs). But, as a private company, I suspect the actions will be even more substantial.
More importantly, this might be a sign that other specialty retailers may seek an exit, such as Pier 1 Imports Inc. (NYSE: PIR). And if so, I think managements will point to the super premium on Restoration Hardware’s deal.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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