Destination Maternity and Orchestra Prémaman To Merge

Moorestown, N.J. and Montpellier, France — Destination Maternity and Orchestra Prémaman S.A. plan to merge, creating a leading global provider of maternity apparel, children’s wear and baby hard goods. The transaction, which was unanimously approved by both boards of directors, creates an estimated $1.1 billion company with 1,800 retail locations.

The merger is subject to customary closing conditions and is currently expected to close mid-2017.

“This highly complementary business combination, which presents compelling value to our shareholders, is a transformative event for both companies,” says Arnaud Ajdler, chairman of Destination Maternity. “With the creation of one of the world’s largest specialty providers of maternity apparel and children’s wear, shareholders of both companies are poised to benefit from a highly diversified product portfolio, improved financial strength and flexibility, and greater distribution and sourcing capabilities. Likewise, consumers will benefit from a significantly expanded product offering that will meet their maternity and early childhood needs made available across multiple channels. With similar cultures and customers, we believe this transaction will enhance our competitive position and open up new avenues of growth for our respective brands in the United States, Europe, and beyond.”

Pierre Mestre, Orchestra’s founder and chairman, says: “We are excited to bring together two companies that share a common vision to make innovative, fashionable and practical maternity goods and children’s wear available to the masses. Orchestra and Destination will achieve greater growth and earnings together than they each could stand-alone. We are confident this merger will allow us to better compete in the rapidly changing retail landscape, benefiting our collective stakeholders over the long term. We are excited to welcome Destination’s accomplished executives and associates to the Orchestra family.”

Destination’s state-of-the-art retail distribution infrastructure and network of U.S. retail locations provides a platform to facilitate Orchestra’s entrance into the world’s largest and most profitable children’s market. Conversely, Orchestra has a global footprint of more than 560 stores that primarily span across Europe, Africa and Asia. Existing stores and new locations throughout the region, along with entry into new markets, provide ample opportunity for international expansion and cross-selling of Destination’s product lines.

Following the closing, the combined company will have an 11-person board, including three independent directors designated by Destination, two additional independent directors, and one employee representative as required by French law. Mestre will serve as chairman of the group. The group will be organized geographically, with a North America business unit and a Rest of World business unit.

Upon completion of the merger, the group, operated under the Orchestra name, will maintain its corporate headquarters located in Montpellier, France. Destination will maintain its headquarters in Moorestown, N.J. and its distribution facility in Florence, N.J.

Guggenheim Securities, LLC is acting as financial advisor and Pepper Hamilton LLP and Bredin Prat are acting as legal advisors to Destination. Moelis & Company is acting as financial advisor and Jones Day is acting as legal advisor to Orchestra.

Orchestra specializes in the creation, manufacture, purchase and sale of all products related to children’s clothing and childcare products. Since 2012, Orchestra has become a major player on the European childcare products market, in particular due to external growth operations, such as the acquisition of Baby 2000 and the Prémaman Group, which is Europe’s oldest maternity wear brand, dating back to 1947. The group now operates in more than 40 countries.

Destination is the world’s largest designer and retailer of maternity apparel. As of October 29, 2016, Destination operates 1,229 retail locations in the United States, Canada, Puerto Rico and England, including 526 stores, predominantly under the trade names Motherhood Maternity®, A Pea in the Pod® and Destination Maternity®, and 703 leased department locations. Destination has international store franchise and product supply relationships in the Middle East, South Korea, Mexico, Israel and India. As of October 29, 2016 Destination has 239 international franchised locations, including 21 standalone stores operated under one of the company’s nameplates and 218 shop-in-shop locations.

For more information, visit http://www.destinationmaternity.com/.

SOURCE: Destination Maternity

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