Limited Brands said Monday it agreed to transfer a 75% stake in its Limited Stores chain to affiliates of Sun Capital Partners and that it finalized the sale of a 75% stake of its Express chain to Golden Gate Capital.
Sun Capital Partners will contribute $50 million of equity capital into the business and will arrange for a $75 million credit facility, said the company, which also owns Victoria's Secret and Bath & Body Works.
The company, which is shedding its underperforming apparel businesses to focus on sexy undergarments and bath and beauty products, said it will receive no cash proceeds from the Limited sale and expects to record an after-tax loss of about $42 million on the deal, which it expects to close within the next 30 days.
Limited Brands , which had previously said that Golden Gate would buy 67 percent of Express for $548 million, said the firm will now pay $602 million for the increased stake.
Limited expects to receive after-tax cash proceeds of $425 million and to record an after-tax gain of about $188 million related to the Express deal.
Both chains will continue to operate under the same brand names and are expected to remain headquartered in their current locations in Columbus, Ohio.
Banc of America Securities advised Limited on the sales of Limited and Express.
Limited shares were down 1.7%, or 48 cents, at $28.51 in morning trade on the New York Stock Exchange.