SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14D-9
(RULE 14d-101)
SOLICITATION/RECOMMENDATION STATEMENT UNDER SECTION
14(d)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
The Gymboree Corporation
(Name of Subject Company)
The Gymboree Corporation
(Name of Persons Filing Statement)
Common stock, par value $0.001 per share
(Title of Class of Securities)
403777105
(CUSIP Number of Class of Securities)
MATTHEW K. MCCAULEY
Chief Executive Officer
The Gymboree Corporation
500 Howard Street
San Francisco, California 94105
(415) 278-7000
(Name, address and telephone numbers of person authorized
to receive
notices and communications on behalf of the persons filing statement)
With copies to:
Brian J. McCarthy, Esq.
Leif B. King, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
(213) 687-5000
|
x
|
Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.
|
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The following is a joint press release issued by The Gymboree Corporation and Bain Capital Partners, LLC on October 11, 2010, announcing the
proposed tender offer and merger.
THE GYMBOREE CORPORATION TO BE ACQUIRED BY BAIN CAPITAL
Shareholders to Receive $65.40 in Cash Per Share
Transaction
Valued at $1.8 Billion
SAN FRANCISCO and BOSTON – October 11, 2010 – The Gymboree Corporation (NASDAQ: GYMB)
(“Gymboree” or the “Company”) and Bain Capital Partners, LLC (“Bain Capital”) today announced that they have entered into a definitive agreement under which affiliates of Bain Capital will acquire all the outstanding
stock of Gymboree for $65.40 per share, or $1.8 billion.
Under the terms of the agreement, which has been unanimously approved by
Gymboree’s Board of Directors, Gymboree stockholders will receive $65.40 in cash for each outstanding share of Gymboree common stock they own, which represents a 57.4% premium to the Company’s unaffected share price on
September 30, 2010, before recent market rumors of a transaction, and a 23.5% premium to Gymboree’s closing stock price on October 8, 2010, the last full trading day before today’s announcement.
“We are pleased to announce this transaction as it delivers significant value to our shareholders,” said Matthew McCauley, Chairman and Chief
Executive Officer of Gymboree. “We want to thank our employees for their hard work and dedication to Gymboree. Bain Capital is a world-class asset management firm with substantial resources and investment experience in the retail industry, and
we believe they will be a great partner as we go forward as a private company.”
“Gymboree is a terrific company with incredible
brand strength and a large population of extremely satisfied customers,” said Jordan Hitch, a Managing Director at Bain Capital. “We look forward to working with Matthew McCauley and the company’s proven and experienced management
team.”
Under the terms of the agreement, it is anticipated that affiliates of Bain Capital will commence a tender offer for all of the
outstanding shares of Gymboree shortly following the execution of the agreement.
If the tender offer is successfully completed, Gymboree
expects the transaction to close by year end. Completion of the transaction is subject to, among other things, the satisfaction of the minimum tender condition of at least 66% of the Company’s common shares, the receipt of the Federal Trade
Commission’s approval under the Hart-Scott-Rodino (HSR) Antitrust
2
Improvements Act of 1976 and other customary closing conditions. In the event that the minimum tender condition is not met, and in certain other circumstances, the parties have agreed to complete
the transaction through a one-step merger after receipt of shareholder approval. Bain Capital has committed financing from Credit Suisse and Morgan Stanley in an amount necessary to complete the transaction. Under certain circumstances, Bain Capital
may delay the closing date in order to complete this financing.
Under the terms of the agreement, Gymboree may solicit acquisition proposals
from third parties for a period of 40 calendar days continuing through November 20, 2010. It is not anticipated that any developments will be disclosed with regard to this process unless the Company’s Board of Directors makes a decision
with respect to a potential superior proposal. There are no guarantees that this process will result in a superior proposal.
Goldman,
Sachs & Co. is acting as exclusive financial advisor to the Special Committee of the Board of Directors of Gymboree and Skadden, Arps, Slate, Meagher & Flom LLP is acting as its counsel. Both Goldman, Sachs & Co. and Peter
J. Solomon Company provided fairness opinions to the Gymboree Special Committee and Board of Directors. Wilson Sonsini Goodrich & Rosati is acting as counsel to Gymboree. Ropes & Gray LLP is acting as Bain Capital’s legal
advisor.
About The Gymboree Corporation
The Gymboree Corporation’s specialty retail brands offer unique, high-quality products delivered with personalized customer service. As of October 2, 2010, the Company operated a total of 1,037
retail stores: 635 Gymboree
®
stores (594 in the United States, 37 in Canada, 2 in Puerto Rico and 2 in
Australia), 147 Gymboree Outlet stores, 122 Janie and Jack
®
shops and 133 Crazy 8
®
stores in the United States. The Company also operates online stores at www.gymboree.com, www.janieandjack.com and
www.crazy8.com, and offers directed parent-child developmental play programs at 671 franchised and Company-operated Gymboree Play & Music
®
centers in the United States and 32 other countries.
About Bain Capital
Bain Capital, LLC
(www.baincapital.com) is a global private investment firm that manages several pools of capital including private equity, venture capital, public equity, high-yield assets and mezzanine capital with approximately $64 billion in assets under
management. Since its inception in 1984, Bain Capital has made private equity investments and add-on acquisitions in more than 300 companies in a variety of industries around the world. Bain Capital private equity investments have included such
leading businesses as Toys “R” Us, Bright Horizons Family Solutions, Michaels Stores, Dollarama, Burlington Coat Factory, Dunkin’ Brands and Lilliput Kidswear. Headquartered in Boston, Bain Capital has offices in New York, Chicago,
London, Munich, Hong Kong, Shanghai, Tokyo, and Mumbai.
Notice to Investors
The tender offer for the outstanding common stock of the Company referred to in this press release has not yet commenced. This press release is neither an offer to purchase nor a
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solicitation of an offer to sell any securities. The solicitation and the offer to buy shares of the Company common stock will be made pursuant to an offer to purchase and related materials that
affiliates of Bain Capital Partners, LLC intends to file with the Securities and Exchange Commission. At the time the offer is commenced affiliates of Bain Capital Partners, LLC will file a tender offer statement on Schedule TO with the Securities
and Exchange Commission, and thereafter the Company will file a solicitation/recommendation statement on Schedule 14D-9 with respect to the offer. The tender offer statement (including an offer to purchase, a related letter of transmittal and other
offer documents) and the solicitation/recommendation statement will contain important information that should be read carefully and considered before any decision is made with respect to the tender offer. These materials will be sent free of charge
to all stockholders of the Company when available. In addition, all of these materials (and all other materials filed by the Company with the Securities and Exchange Commission) will be available at no charge from the Securities and Exchange
Commission through its website at www.sec.gov. Free copies of the offer to purchase, the related letter of transmittal and certain other offering documents will be made available by an affiliate of Bain Capital Partners, LLC when available.
Investors and security holders may also obtain free copies of the documents filed with the Securities and Exchange Commission by the Company by contacting the Company Investor Relations at 500 Howard Street, San Francisco, CA 94105, telephone number
415-278-7933 or investor_relations@gymboree.com.
Additional Information about the Merger and Where to Find It
In connection with the potential merger, the Company would file a proxy statement with the Securities and Exchange Commission. Additionally, the Company
would file other relevant materials with the Securities and Exchange Commission in connection with the proposed acquisition of the Company by affiliates of Bain Capital Partners, LLC pursuant to the terms of an Agreement and Plan of Merger by and
among the Company and affiliates of Bain Capital Partners, LLC. The materials to be filed by the Company with the Securities and Exchange Commission may be obtained free of charge at the Securities and Exchange Commission’s web site at
www.sec.gov. Investors and stockholders also may obtain free copies of the proxy statement from the Company by contacting the Company Investor Relations at 500 Howard Street, San Francisco, CA 94105, telephone number 415-278-7933 or
investor_relations@gymboree.com. Investors and security holders of the Company are urged to read the proxy statement and the other relevant materials when they become available before making any voting or investment decision with respect to the
proposed merger because they will contain important information about the merger and the parties to the merger.
The Company and its
respective directors, executive officers and other members of their management and employees, under the Securities and Exchange Commission rules, may be deemed to be participants in the solicitation of proxies of the Company’s stockholders in
connection with the proposed merger. Investors and security holders may obtain more detailed information regarding the names, affiliations and interests of certain of the Company’s executive officers and directors in the solicitation by reading
the Company’s proxy statement for its 2010 annual meeting of stockholders and the proxy statement and other relevant materials which may be filed with the Securities and Exchange Commission in connection with the merger when and if they become
available. Information concerning the interests of the Company’s participants in
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the solicitation, which may, in some cases, be different than those of the Company’s stockholders generally, will be set forth in the proxy statement relating to the merger when and if it
becomes available. Additional information regarding the Company’s executive officers and directors in the solicitation is available by reading the Company’s proxy statement for its 2010 annual meeting of stockholders.
Forward Looking Statements
This press
release contains forward-looking statements relating to the potential acquisition of The Gymboree Corporation by affiliates of Bain Capital Partners, LLC, including the expected date of closing of the acquisition and the potential benefits of the
merger. These are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. The actual results of the acquisition could vary materially as a result of a number of factors,
including: uncertainties as to how many of The Gymboree Corporation’s stockholders will tender their stock in the offer; the possibility that competing offers will be made; and the possibility that various closing conditions for the transaction
may not be satisfied or waived. Other factors that may cause actual results to differ materially include those set forth in the reports that we file from time to time with the Securities and Exchange Commission, including our annual report on Form
10-K for the year ended January 30, 2010 and quarterly and current reports on Form 10-Q and 8-K. These forward-looking statements reflect The Gymboree Corporation’s expectations as of the date of this press release. The Gymboree
Corporation undertakes no obligation to update the information provided herein.
Contacts for Gymboree
Investor Relations
Jeffrey P. Harris
415-278-7933
investor_relations@gymboree.com
Media
Relations
Mark Mizicko
415-278-7503
media_relations@gymboree.com
Joele Frank, Wilkinson Brimmer Katcher
Judy
Wilkinson / Meaghan Repko
212-355-4449
Contacts for Bain Capital
Stanton Public Relations and Marketing
Alex Stanton
212-780-0701
astanton@stantonprm.com
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The following letter was sent to employees of The Gymboree Corporation on October 11, 2010.
To All Gymboree Employees,
I am excited to share with you some positive news for all of us in the
Gymboree Family.
We have just announced that the Board of Directors has approved the sale of Gymboree to Bain Capital, a transaction that
will take the Company private. Bain Capital is a highly regarded global investment company that seeks out premiere businesses that are well-positioned for long-term growth. Bain Capital’s interest in Gymboree is a compliment to you, and
reflects your hard work and dedication, which has helped build Gymboree into the strong company it is today. We believe that this transaction is in the best interest of the Company, franchisees, customers and shareholders. Additionally, as a private
company we will have additional flexibility as we continue the pursuit of reaching every mom in America, and moms around the world.
Bain
Capital has a proven track record as an investor, and their interest in Gymboree is an endorsement of the progress that we have made together over the past several years, and a vote of confidence in the future of this company. Bain Capital shares
our commitment to providing the very best in classes for early childhood development and the very best wholesome fashion for kids. They share our belief that Gymboree and our family of brands can achieve its goal of long-term worldwide growth.
We want all of you to know how much we value the work you do and how much we appreciate how your contributions have helped to make Gymboree
the company it is today: a strong global brand with over $1 billion in sales and over 11,000 employees around the world.
A copy of the press
release we issued this morning is attached. If your family or friends have questions regarding this announcement, please feel free to share the press release with them. I’m sure that there will be many questions, and as a management team we
will do our best to provide timely answers.
We are in the early stages of this process and expect the transaction to close at the end of this
year. We will update you on our progress as events warrant. In the meantime, please continue to do exactly what you have been: providing worldwide leadership in early childhood development, and bringing the best clothing for kids to every mom in
America and moms around the world.
Thank you for your continued support and dedication to Gymboree.
Sincerely,
/s/ Matt McCauley
Matt McCauley
Chairman and CEO
6
Notice to Investors
The tender offer for the outstanding common stock of the Company referred to in this document has not yet commenced. This document is neither an offer to purchase nor a solicitation of an offer to sell
any securities. The solicitation and the offer to buy shares of the Company common stock will be made pursuant to an offer to purchase and related materials that affiliates of Bain Capital Partners, LLC intends to file with the Securities and
Exchange Commission. At the time the offer is commenced affiliates of Bain Capital Partners, LLC will file a tender offer statement on Schedule TO with the Securities and Exchange Commission, and thereafter the Company will file a
solicitation/recommendation statement on Schedule 14D-9 with respect to the offer. The tender offer statement (including an offer to purchase, a related letter of transmittal and other offer documents) and the solicitation/recommendation statement
will contain important information that should be read carefully and considered before any decision is made with respect to the tender offer. These materials will be sent free of charge to all stockholders of the Company when available. In addition,
all of these materials (and all other materials filed by the Company with the Securities and Exchange Commission) will be available at no charge from the Securities and Exchange Commission through its website at www.sec.gov. Free copies of the offer
to purchase, the related letter of transmittal and certain other offering documents will be made available by an affiliate of Bain Capital Partners, LLC when available. Investors and security holders may also obtain free copies of the documents
filed with the Securities and Exchange Commission by the Company by contacting the Company Investor Relations at 500 Howard Street, San Francisco, CA 94105, telephone number 415-278-7933 or investor_relations@gymboree.com.
Additional Information about the Merger and Where to Find It
In connection with the potential merger, the Company would file a proxy statement with the Securities and Exchange Commission. Additionally, the Company would file other relevant materials with the
Securities and Exchange Commission in connection with the proposed acquisition of the Company by affiliates of Bain Capital Partners, LLC pursuant to the terms of an Agreement and Plan of Merger by and among the Company and affiliates of Bain
Capital Partners, LLC. The materials to be filed by the Company with the Securities and Exchange Commission may be obtained free of charge at the Securities and Exchange Commission’s web site at www.sec.gov. Investors and stockholders also may
obtain free copies of the proxy statement from the Company by contacting the Company Investor Relations at 500 Howard Street, San Francisco, CA 94105, telephone number 415-278-7933 or investor_relations@gymboree.com. Investors and security holders
of the Company are urged to read the proxy statement and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed merger because they will contain important information
about the merger and the parties to the merger.
The Company and its respective directors, executive officers and other members of their
management and employees, under the Securities and Exchange Commission rules, may be deemed to be participants in the solicitation of proxies of the Company’s stockholders in connection with the proposed merger. Investors and security holders
may obtain more detailed information regarding the names, affiliations and interests of certain of the Company’s executive
7
officers and directors in the solicitation by reading the Company’s proxy statement for its 2010 annual meeting of stockholders and the proxy statement and other relevant materials which may
be filed with the Securities and Exchange Commission in connection with the merger when and if they become available. Information concerning the interests of the Company’s participants in the solicitation, which may, in some cases, be different
than those of the Company’s stockholders generally, will be set forth in the proxy statement relating to the merger when and if it becomes available. Additional information regarding the Company’s executive officers and directors in the
solicitation is available by reading the Company’s proxy statement for its 2010 annual meeting of stockholders.
Forward Looking
Statements
This document contains forward-looking statements relating to the potential acquisition of The Gymboree Corporation by
affiliates of Bain Capital Partners, LLC, including the expected date of closing of the acquisition and the potential benefits of the merger. These are forward-looking statements for purposes of the safe harbor provisions under the Private
Securities Litigation Reform Act of 1995. The actual results of the acquisition could vary materially as a result of a number of factors, including: uncertainties as to how many of The Gymboree Corporation’s stockholders will tender their stock
in the offer; the possibility that competing offers will be made; and the possibility that various closing conditions for the transaction may not be satisfied or waived. Other factors that may cause actual results to differ materially include those
set forth in the reports that we file from time to time with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended January 30, 2010 and quarterly and current reports on Form 10-Q and 8-K. These
forward-looking statements reflect The Gymboree Corporation’s expectations as of the date of this document. The Gymboree Corporation undertakes no obligation to update the information provided herein.
The following letter was sent to franchisees of The Gymboree Corporation on October 11, 2010.
Dear Gymboree Play & Music Franchisees,
Today, October 11, The Gymboree Corporation announced that the Company’s Board of Directors approved the sale of Gymboree to Bain
Capital, subject to the satisfaction of certain customary closing conditions. The press release we issued is attached for your reference.
Under the proposed merger agreement, Bain Capital will purchase Gymboree, including the Gymboree retail brand, Janie & Jack, Crazy 8, Gymboree
Outlet and the Gymboree Play & Music division. If the closing of the transaction proceeds according to plan, we expect the transaction to close by calendar year end.
Bain Capital is a world-class asset management firm with substantial resources and investment experience in the retail industry, and we believe they are well positioned to partner with Gymboree going
forward as a private company. Bain Capital is also committed to advancing our
8
brand and growing our global footprint to enable us to reach every mom in America and moms around the world. We believe this proposed transaction will be good for our franchisees, employees and
customers.
The current franchise agreements, domestic and international, along with all related conditions and terms, will remain in effect
until the close of the proposed transaction and will be assigned to the new entity as part of the acquisition.
Our vision is to reach every
mom around the world. GPM is an important part of that strategy with more than 650 locations in 33 different countries. Since 1976, Gymboree Play & Music has been supporting new families with age appropriate activities and experiences that
help strengthen not only family and community ties but provide the foundation for lifelong learning. We expect GPM to remain at the forefront of parent/child programming in the years ahead and are committed to supporting the position of global
leaders.
We are pleased to announce this proposed transaction and believe it is in the best interest of our company, franchisees, team
members, customers and shareholders. We will continue to communicate with you during this process to provide updates on timing and relevant developments. In the meantime, if you have any questions, please contact Jill Johnston.
With best wishes for continued success as we look forward to our 35
th
year,
Sincerely,
/s/ Matt McCauley
Matt McCauley
Chairman and CEO
Notice to Investors
The tender offer
for the outstanding common stock of the Company referred to in this document has not yet commenced. This document is neither an offer to purchase nor a solicitation of an offer to sell any securities. The solicitation and the offer to buy shares of
the Company common stock will be made pursuant to an offer to purchase and related materials that affiliates of Bain Capital Partners, LLC intends to file with the Securities and Exchange Commission. At the time the offer is commenced affiliates of
Bain Capital Partners, LLC will file a tender offer statement on Schedule TO with the Securities and Exchange Commission, and thereafter the Company will file a solicitation/recommendation statement on Schedule 14D-9 with respect to the offer. The
tender offer statement (including an offer to purchase, a related letter of transmittal and other offer documents) and the solicitation/recommendation statement will contain important information that should be read carefully and considered before
any decision is made with respect to the tender offer. These materials will be sent free of charge to all stockholders of the
9
Company when available. In addition, all of these materials (and all other materials filed by the Company with the Securities and Exchange Commission) will be available at no charge from the
Securities and Exchange Commission through its website at www.sec.gov. Free copies of the offer to purchase, the related letter of transmittal and certain other offering documents will be made available by an affiliate of Bain Capital Partners, LLC
when available. Investors and security holders may also obtain free copies of the documents filed with the Securities and Exchange Commission by the Company by contacting the Company Investor Relations at 500 Howard Street, San Francisco, CA 94105,
telephone number 415-278-7933 or investor_relations@gymboree.com.
Additional Information about the Merger and Where to Find It
In connection with the potential merger, the Company would file a proxy statement with the Securities and Exchange Commission.
Additionally, the Company would file other relevant materials with the Securities and Exchange Commission in connection with the proposed acquisition of the Company by affiliates of Bain Capital Partners, LLC pursuant to the terms of an Agreement
and Plan of Merger by and among the Company and affiliates of Bain Capital Partners, LLC. The materials to be filed by the Company with the Securities and Exchange Commission may be obtained free of charge at the Securities and Exchange
Commission’s web site at www.sec.gov. Investors and stockholders also may obtain free copies of the proxy statement from the Company by contacting the Company Investor Relations at 500 Howard Street, San Francisco, CA 94105, telephone number
415-278-7933 or investor_relations@gymboree.com. Investors and security holders of the Company are urged to read the proxy statement and the other relevant materials when they become available before making any voting or investment decision with
respect to the proposed merger because they will contain important information about the merger and the parties to the merger.
The Company
and its respective directors, executive officers and other members of their management and employees, under the Securities and Exchange Commission rules, may be deemed to be participants in the solicitation of proxies of the Company’s
stockholders in connection with the proposed merger. Investors and security holders may obtain more detailed information regarding the names, affiliations and interests of certain of the Company’s executive officers and directors in the
solicitation by reading the Company’s proxy statement for its 2010 annual meeting of stockholders and the proxy statement and other relevant materials which may be filed with the Securities and Exchange Commission in connection with the merger
when and if they become available. Information concerning the interests of the Company’s participants in the solicitation, which may, in some cases, be different than those of the Company’s stockholders generally, will be set forth in the
proxy statement relating to the merger when and if it becomes available. Additional information regarding the Company’s executive officers and directors in the solicitation is available by reading the Company’s proxy statement for its 2010
annual meeting of stockholders.
Forward Looking Statements
This document contains forward-looking statements relating to the potential acquisition of The Gymboree Corporation by affiliates of Bain Capital Partners, LLC, including the expected date
10
of closing of the acquisition and the potential benefits of the merger. These are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation
Reform Act of 1995. The actual results of the acquisition could vary materially as a result of a number of factors, including: uncertainties as to how many of The Gymboree Corporation’s stockholders will tender their stock in the offer; the
possibility that competing offers will be made; and the possibility that various closing conditions for the transaction may not be satisfied or waived. Other factors that may cause actual results to differ materially include those set forth in the
reports that we file from time to time with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended January 30, 2010 and quarterly and current reports on Form 10-Q and 8-K. These forward-looking
statements reflect The Gymboree Corporation’s expectations as of the date of this document. The Gymboree Corporation undertakes no obligation to update the information provided herein.
11
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