Restoration Hardware Completes Sale to Catterton Partners
Tower Three Partners Joins Catterton with Equity Investment
CORTE MADERA, Calif., June 17 /PRNewswire/ -- Restoration Hardware, Inc. today announced that the acquisition of the Company by a group of investors including Catterton Partners and Gary Friedman, the Company's Chairman, President and Chief Executive Officer, has been completed. Under the terms of the merger agreement, which was approved by shareholders on June 12, 2008, all of the outstanding shares of common stock of Restoration Hardware, other than those exchanged by certain shareholders participating with Catterton Partners in the transaction, will receive $4.50 per share in cash.
In connection with the closing, Restoration Hardware and Catterton Partners also announced that Tower Three Partners LLC, an operationally focused private equity firm, has made an equity investment in the Company. Tower Three's investment is approximately equal to the investment made by Catterton. Together, Catterton and Tower Three will have a controlling equity interest in the Company.
"We are pleased to announce the successful closing of this transaction and the investment by Tower Three," said Mr. Friedman. "With Tower Three's investment, we will gain access to a team of professionals with a proven track record of building operational excellence. Combined with Catterton's expertise in developing and growing leading consumer brands, I believe this partnership will greatly benefit Restoration Hardware's stakeholders, customers, and team members."
"With a leading brand, management team and multi-channel operating platform, Restoration Hardware has a solid foundation in place," said Bill Forrest, Founding Partner of Tower Three. "We look forward to working with Catterton Partners and Gary's leadership team to capitalize on these strengths and drive sustainable growth and profitability."
"We have great respect for the principals of Tower Three, having worked and invested along side them for over a decade," said J. Michael Chu, Managing Partner of Catterton Partners. "We are delighted to partner with Tower Three's principals and the Restoration Hardware team to grow and further develop one of the leading brands in home furnishings."
As a result of the acquisition closing, Restoration Hardware's common stock will cease trading on NASDAQ prior to the opening of the market on June 18, 2008, and will no longer be listed on NASDAQ.
Shareholders who hold shares through a bank or broker will not have to take any action to have their shares converted into cash, since these conversions will be handled by the bank or broker. Shareholders who hold certificates can exchange their certificates for $4.50 per share in cash, without interest, through Restoration Hardware's paying agent, Computershare. Computershare will be mailing out instructions to registered shareholders in the next few days regarding specific actions they will need to take to exchange their shares for the cash consideration.
In addition, under the terms of the previously announced preliminary settlement of shareholder litigation, holders of common stock as of the date of the closing of the merger will also be entitled to receive a payment from a shareholder common fund in the amount of approximately $0.10 to $0.13 per share. Certain shareholders including those participating with Catterton Partners in the transaction and those who are also directors of Restoration Hardware will not be entitled to receive payment from the shareholder common fund. The exact payout per share of common stock will depend upon various factors including the amount of attorneys' fees and expenses deducted from the common fund.
About Restoration Hardware
Restoration Hardware, Inc. is a specialty retailer of high quality home furnishings, bath fixtures and bathware, functional and decorative hardware, gifts and related merchandise that reflects the Company's classic and authentic American point of view. Restoration Hardware sells its merchandise offering through its retail stores, catalog (800-762-1005) and on-line at http://www.restorationhardware.com and http://www.rhbabyandchild.com. The Company currently operates 100 retail stores and 10 outlet stores in 30 states, the District of Columbia and Canada.
About Tower Three Partners
Tower Three Partners LLC is an operationally focused private equity firm formed to make a concentrated number of control investments in businesses in transition. Tower Three targets middle market companies across all business sectors that are currently experiencing operational or sector challenges. Tower Three looks for situations where it can leverage the expertise of its senior professionals in implementing operational and financial improvements. The firm's average investment size ranges from approximately $75 million to $150 million.
About Catterton Partners
With more than $2.3 billion under management, Catterton Partners is a leading private equity firm in the U.S. focused exclusively on the consumer industry. Since its founding in 1990, Catterton has leveraged its investment capital, strategic and operating skills, and network of industry contacts to establish one of the strongest investment track records in the consumer industry. Catterton invests in all major consumer segments, including Food and Beverage, Retail and Restaurants, Consumer Products and Services, and Media and Marketing Services. Catterton has led investments in companies such as Breyers Yogurt, Wellness Pet Food, The Worth Collection, Build-A-Bear Workshop, Cheddar's Restaurants, P.F. Chang's China Bistro, Baja Fresh Mexican Grill, Frederic Fekkai, Kettle Foods, Farley's and Sathers Candy, Odwalla and Heartland Recreational Vehicles. More information about the firm can be found at http://www.cpequity.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This release contains forward-looking statements that involve known and unknown risks. Such forward-looking statements include, without limitation, statements regarding the benefits of the completed transaction and future performance of Restoration Hardware and statements containing words such as "likely" or "expects" and words of similar import or statements of management's opinion. There are a number of risks and uncertainties that could cause actual results to differ materially from these forward-looking statements, including that Restoration Hardware may be adversely affected by unexpected costs of the transaction or by other economic, business and/or competitive factors. Additional factors that may affect the future results of Restoration Hardware are set forth in its filings with the Securities and Exchange Commission, including its recent filings on Forms 10-K, 10-Q and 8-K, including, but not limited to, those described in Restoration Hardware's Form 10-Q for the fiscal quarter ended May 3, 2008, in Part I, Item 2 thereof ("Management's Discussion and Analysis of Financial Condition and Results of Operations"), in Part I, Item 4 thereof ("Controls and Procedures"), and in Part II, Item 1A thereof ("Risk Factors"). Unless required by law, Restoration Hardware undertakes no obligation to publicly update or revise any forward- looking statements, whether as a result of new information, future events or otherwise.
Contacts Restoration Hardware Catterton Partners Tower Three Chris Newman Eric Brielmann, Andrea Salas Partners Chief Financial Officer and Joele Frank, Bill Forrest 415-945-4530 Wilkinson Brimmer Katcher Partner 212-355-4449 203-485-5800
SOURCE Restoration Hardware, Inc. -0- 06/17/2008 /CONTACT: Chris Newman, Chief Financial Officer of Restoration Hardware, Inc., +1-415-945-4530; or Eric Brielmann, or Andrea Salas, or Joele Frank, all of Wilkinson Brimmer Katcher, +1-212-355-4449, for Catterton Partners; or Bill Forrest, Partner of Tower Three Partners, +1-203-485-5800/ /Web site: http://www.restorationhardware.com http://www.rhbabyandchild.com http://www.cpequity.com / (RSTO) CO: Restoration Hardware, Inc.; Catterton Partners; Tower Three Partners ST: California IN: FIN HOU REA SU: TNM NW-BL -- AQTU127 -- 4632 06/17/2008 19:17 EDT http://www.prnewswire.com