Bed Bath & Beyond Inc. has entered into a definitive deal to sell Cost Plus World Market to California-based Kingswood Capital Management, according to a Monday (Dec. 14) announcement.
The deal encompasses 243 physical locations, two distribution facilities, the Cost Plus digital business and an office in California, while it is anticipated that the business will keep running as a stand-alone brand. It is foreseen to close before the conclusion of Bed Bath & Beyond’s fiscal year end in February of next year.
The arrangement is subject to “customary closing conditions,” with the inclusion of the expiration or termination of the applicable waiting timeframe with the Hart-Scott Rodino Antitrust Improvements Act of 1976.
Both firms have consented to a transition service deal after the close of the arrangement to assist in ensuring business continuity. Bryan Cave and B. Riley Securities Inc. were among the advisors to Bed Bath & Beyond on the deal.
Bed Bath & Beyond has also grown its overall share repurchase initiative to up to $825 million from up to $675 million over the three years to come by greenlighting a new accelerated share repurchase program (ASR) to repurchase an aggregate of $150 million of its common stock “subject to market conditions,” according to the announcement.
The new ASR effort comes in addition to the $225 million ASR effort unveiled in October, according to the announcement.
“We’ve taken deliberate steps throughout the year to streamline our portfolio and fortify our strategic focus in Home, Baby and Beauty & Wellness, and today’s announcement represents the conclusion of this work,” Bed Bath & Beyond President and Chief Executive Officer Mark Tritton said in the announcement. “In all, we have unlocked significant value from the divestiture of five business concepts this year, and we have also meaningfully reduced our lease liability and overall debt.”
The news comes as Bed Bath & Beyond is taking control of its fulfillment issues via a collaboration with Shipt. The firm has unveiled a same-day delivery promotion available to Bed Bath & Beyond and buybuy BABY shoppers.
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