Divestiture • Retail

Sun Capital Partners and Cerberus Capital Management Acquire Mervyn s

On July 29, 2004, private equity firm Sun Capital Partners and asset manager Cerberus Capital Management acquired retailer Mervyn s from Target for 1.7B USD

Acquisition Context
  • This is Sun Capital Partners’ 3rd and Cerberus Capital Management’s 1st transaction in the Retail sector.
  • This is Sun Capital Partners’ and Cerberus Capital Management’s 3rd largest (disclosed) transaction.
  • This is Sun Capital Partners’ 15th and Cerberus Capital Management’s 5th transaction in the United States.
  • This is Sun Capital Partners’ 2nd and Cerberus Capital Management’s 1st transaction in California.
Investment Fate
  • Mervyn s went bankrupt in 2008.

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M&A Deal Summary

Date July 29, 2004
Target Mervyn s
Sector Retail
Buyer(s) Sun Capital Partners
Cerberus Capital Management
Sellers(s) Target
Deal Type Divestiture
Deal Value 1.7B USD

Target Company

Mervyn s

Hayward, California, United States
Mervyn's was a retail department store that was formed in 1949. The retail chain featured national brands and carried a broad selection of items - from apparel to electronics.
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Buyers Overview 2

Buyer

Sun Capital Partners

Boca Raton, Florida, United States

Investor Investor Investor Investor Investor


Category Private Equity Firm
Founded 1995
PE ASSETS 13.0B USD
Size Mega
Type Sector Agnostic
DESCRIPTION
Sun Capital's corporate headquarters in Boca Raton, Florida.
Sun Capital's corporate headquarters in Boca Raton, Florida.

Sun Capital Partners is a large private equity firm focused on leveraged buyouts, equity, debt, and other control investments in North America, Asia, and Europe. Sun looks for businesses that can benefit from the Firm's operating experience including underperformers, turnarounds, and special situations. Target companies typically have $50 million to $1 billion in revenue with strong market positions. Sectors of interest include paper and packaging, food and beverages, metals and mining, automotive after-market parts, consumer products, financial services, healthcare, media and communications, building products, telecommunications, technology, retailing and catalogs, restaurants, manufacturing and industrial. Sun Capital was formed in 1995 and is based in Boca Raton, Florida.


Deal Context for Buyer #
Overall 15 of 172
Sector: Retail 3 of 29
Type: Divestiture 4 of 24
State: California 2 of 16
Country: United States 15 of 118
Year: 2004 4 of 5
Size (of disclosed) 1 of 16
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2004-07-08 Life Uniform Co.

St. Louis, Missouri, United States

Life Uniform is the leading retailer of specialty healthcare apparel in the United States and one of the only national multi-channel retailer in the medical apparel industry with products being sold through 195 stores, catalogs, e-commerce, and sales events held at major hospitals and medical facilities. Products include medical scrubs, lab coats, pants, shoes, and accessories such as stethoscopes, bags, and badge holder.

Buy -
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2004-12-01 DuraFiber Technologies

Huntersville, North Carolina, United States

DuraFiber Technologies, Inc. is a producer of polyester fibers and fabrics for industrial and tire reinforcement applications.

Buy -
Buyer

Cerberus Capital Management

New York, New York, United States

Investor Investor Investor Investor Investor


Category Asset Manager
Founded 1992
PE ASSETS 55.0B USD
Size Mega
Type Sector Agnostic
DESCRIPTION

Cerberus Capital Management is a private investment firm that targets a wide range of global investments. Cerberus primarily looks for undervalued or distressed situations. Industry sectors of interest include aerospace and defense, apparel, automotive and industrial, building products, commercial services, consumer and retail, financial services, healthcare, manufacturing and distribution, paper, packaging, and printing, real estate, technology, telecommunications, transportation, and travel. In addition to private equity investing, Cerberus also provides corporate credit and acquires real estate. Cerberus was formed in 1992 by Steve Feinberg and is based in New York City.


Deal Context for Buyer #
Overall 7 of 93
Sector: Retail 1 of 7
Type: Divestiture 2 of 14
State: California 1 of 6
Country: United States 5 of 68
Year: 2004 6 of 7
Size (of disclosed) 3 of 15
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2004-05-07 BlueLinx

Marietta, Georgia, United States

BlueLinx is a distributor of building products. The Company distributes products in two principal categories: structural products and specialty products. Structural products include plywood, oriented strand board, rebar and remesh, lumber and other wood products primarily used for structural support, walls, and flooring in construction projects. Specialty products include roofing, insulation, specialty panels, moulding, engineered wood products, vinyl products (used primarily in siding), outdoor living, particle board, and metal products. BlueLinx was founded in 2004 and is based in Marietta, Georgia.

Buy -
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2004-08-30 LNR Property

Miami Beach, Florida, United States

LNR Property finances, develops, acquires and manages commercial and residential real estate and invests in real estate-related securities.

Buy -

Seller Profile 1

SELLER

Target

Minneapolis, Minnesota, United States

Category Company
Founded 1902
Sector Retail
Employees450,000
Revenue 106.6B USD (2025)
DESCRIPTION
View of Target's corporate headquarters in downtown Minneapolis, Minnesota.
View of Target's corporate headquarters in downtown Minneapolis, Minnesota.

Target is a general merchandise retailer serving the US market. The Target brand opened its first store in 1962 and currently operates more than 1,800 stores. Target was formed in 1902 and is based in Minneapolis, Minnesota.


Deal Context for Seller #
Overall 3 of 5
Sector: Retail 3 of 4
Type: Divestiture 3 of 5
State: California 1 of 1
Country: United States 3 of 5
Year: 2004 2 of 2
Size (of disclosed) 3 of 3
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2004-06-10 Marshall Field & Co.

Minneapolis, Minnesota, United States

Marshall Field & Co. a high-end department store chain.

Sell $3.2B
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2010-01-08 Smith & Hawken

Novato, California, United States

Smith & Hawken Ltd. is a brand of garden-inspired products that includes pottery, watering equipment, gardening tools, outdoor furniture and live goods.

Buy -