M&A Deal Summary

Gordon Brothers Finance Co., Prospect Capital Management and Lee Equity Partners Acquire Deb Shops

On October 1, 2007, lender Gordon Brothers Finance Co., business development company Prospect Capital Management and private equity firm Lee Equity Partners acquired retailer Deb Shops for 395M USD

Acquisition Highlights
  • This is Gordon Brothers Finance Co.’s 9th, Prospect Capital Management’s 1st and Lee Equity Partners’ 1st transaction in the Retail sector.
  • This is Gordon Brothers Finance Co.’s 2nd, Prospect Capital Management’s 4th and Lee Equity Partners’ 2nd largest (disclosed) transaction.
  • This is Gordon Brothers Finance Co.’s 8th, Prospect Capital Management’s 33rd and Lee Equity Partners’ 3rd transaction in the United States.
  • This is Gordon Brothers Finance Co.’s 1st, Prospect Capital Management’s 2nd and Lee Equity Partners’ 1st transaction in Pennsylvania.
Investment Fate
  • Deb Shops went bankrupt in 2011.
  • Deb Shops was sold to a financial buyer in 2011.
  • Deb Shops went bankrupt in 2014.

M&A Deal Summary

Date 2007-10-01
Target Deb Shops
Sector Retail
Buyer(s) Gordon Brothers Finance Co.
Prospect Capital Management
Lee Equity Partners
Deal Type Going Private
Deal Value 395M USD

Target

Deb Shops

Philadelphia, Pennsylvania, United States
Deb Shops is a mall-based, specialty retailer of fashionable, value-priced apparel and accessories for junior females in both regular and plus sizes. Headquartered in Philadelphia, PA, the Company operates over 340 stores in the U.S. principally under two store formats: junior only and junior / plus combination.

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Buyer(S) 3

Buyer

Gordon Brothers Finance Co.

Boston, Massachusetts, United States

Investor Investor Investor Investor Investor


Category Lender
Founded 1903
PE ASSETS 500M USD
Size Middle-Market
Type Sector Agnostic
DESCRIPTION

GB Merchant Partners (GB) is the private investment arm of the Gordon Brothers Group. GB looks to make traditional private equity investments as well as provide structured loans and acquire secondary debt instruments. Within private equity, GB seeks investments in all segments of the consumer products and services sectors, including retail, distribution, wholesale, licensing and manufacturing. Target companies 'usually have meaningful brand equity, or a product or service that is capable of creating a leading and defensible market position'. Prospective transactions include management buyouts, growth capital financings, as well as restructurings or turnarounds. GB is based in Boston with an additional office in New York City.


DEAL STATS #
Overall 12 of 23
Sector: Retail M&A 9 of 12
Type: Going Private M&A Deals 2 of 3
State: Pennsylvania M&A 1 of 1
Country: United States M&A 8 of 13
Year: 2007 M&A 2 of 3
Size (of disclosed) 2 of 3
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2007-08-23 Spencer s

Egg Harbor City, New Jersey, United States

Spencer's is a lifestyle retail company that operates two unique, national brands Spencer’s and Spirit Halloween throughout the United States, Canada, Puerto Rico, and online. Spencer's was founded in 1947 and is based in Egg Harbor City, New Jersey.

Sell -
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2007-12-01 Claire de Lune

Ville Saint-Laurent, Quebec, Canada

Headquartered in Montreal, Canada, Clair de Lune is a leading wholesaler and retailer of candles, fragrances, and home accents. The Company operates over 75 stores throughout Quebec, Ontario, New Brunswick, and Nova Scotia

Buy -
Buyer

Prospect Capital Management

New York, New York, United States

Investor Investor Investor Investor Investor


Category Business Development Company
Founded 1988
Size Middle-Market
Type Sector Agnostic
DESCRIPTION

Prospect Capital Corporation is a publicly traded mezzanine debt and private equity firm that primarily provides non-control financing to support growth, recapitalizations, acquisitions, and development. Prospect will selectively consider control acquisitions by providing multiple levels of the capital structure. Prospect was initially formed in 1988 and went public 2004. The Firm is based in New York City.


DEAL STATS #
Overall 34 of 86
Sector: Retail M&A 1 of 1
Type: Going Private M&A Deals 1 of 6
State: Pennsylvania M&A 2 of 5
Country: United States M&A 33 of 83
Year: 2007 M&A 16 of 18
Size (of disclosed) 4 of 10
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2007-10-01 Hoffmaster Group

Oshkosh, Wisconsin, United States

Hoffmaster Group is a designer, manufacturer and supplier of decorated, premium disposable tableware (including napkins, plates, tablecovers and placemats) sold to major consumer retail and foodservice customers. Hoffmaster Group was founded in 1947 and is based in Oshkosh, Wisconsin.

Buy -
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2007-10-10 Resco Products

Pittsburgh, Pennsylvania, United States

Resco Products is a designer and manufacturer of refractory materials. Refractories are consumable materials used as protective linings for high-temperature furnaces, containers carrying molten metals, and a range of other harsh environment industrial situations. Resco Products was founded in 1946 and is based in Pittsburgh, Pennsylvania.

Buy -
Buyer

Lee Equity Partners

New York, New York, United States

Investor Investor Investor Investor Investor


Category Private Equity Firm
Founded 2006
PE ASSETS 5.0B USD
Size Large
Type Sector Agnostic
DESCRIPTION

Lee Equity Partners is a private investment firm that looks for buyout and growth capital investments across a range of industries. Lee Equity Partners seeks investments requiring $50 to $150 million of equity capital. Lee Equity Partners was formed in 2006 and is based in New York, New York.


DEAL STATS #
Overall 3 of 40
Sector: Retail M&A 1 of 1
Type: Going Private M&A Deals 1 of 3
State: Pennsylvania M&A 1 of 2
Country: United States M&A 3 of 34
Year: 2007 M&A 2 of 2
Size (of disclosed) 2 of 5
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2007-09-24 MemberHealth

Solon, Ohio, United States

MemberHealth, Inc. Provider of prescription drug benefits and a national Medicare Part D sponsor.

Sell $650M
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2008-11-25 MidCap Financial

Bethesda, Maryland, United States

MidCap Financial is a commercial finance company focused on providing debt solutions to middle-market healthcare companies. MidCap Financial was founded in 2008 and is based in Bethesda, Maryland.

Buy -