TPG Capital and Leonard Green & Partners to Acquire J.crew Group, Inc. for $43.50 Per Share in Cash

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Press Release: TPG Capital and Leonard Green & Partners to Acquire J.Crew Group, Inc. for $43.50 Per Share in Cash
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  Press Release TPG Capital and Leonard Green & Partners to Acquire J.Crew Group,Inc. for $43.50 Per Share in Cash   Millard Drexler Will Remain as Chairman and CEO and Significant Shareholder Transaction Valued at $3.0 Billion New York, NY; November 23, 2010 –  J.Crew Group, Inc. (NYSE: JCG) today announced that it has entered into a definitive agreement to be acquired by funds affiliated with TPG Capital andLeonard Green & Partners, L.P. Millard Drexler will continue as Chairman and CEO and main - tain a significant equity investment in J.Crew.Under the terms of the agreement, holders of the outstanding common shares of J.Crew willreceive $43.50 per share in cash, or a total of approximately $3.0 billion. The price represents a premium of 29% to J.Crew’s average closing share price over the last month.A Special Committee of the J.Crew Board of Directors, comprised of four independentdirectors, and advised by independent financial and legal advisors, negotiated the transactionand recommended it to the full Board. The agreement was approved by the full Board other thanJames Coulter, a partner of TPG Capital, and Millard Drexler, who recused themselves from thevote.Millard Drexler, J.Crew Chairman and CEO, said, “I am pleased to announce this agreement asit delivers significant value to our shareholders. In addition, it is a clear endorsement of J.Crewand of the hard work and commitment of each and every one of our associates. As I have alwayssaid, we are in this for the long term and we do what we do day in and day out so we can deliver the best possible products to our customers. TPG Capital, with whom we have a long workingrelationship, along with Leonard Green & Partners, are both well respected private investmentfirms whose substantial resources and experience will enable us to invest in our future growth. Iam excited to be partnering with TPG Capital and Leonard Green & Partners on this transactionand that our management team, including our President Jenna Lyons, will continue to work towards our future.”Carrie Wheeler, Partner of TPG Capital, stated: “We are proud of our 13-year history withJ.Crew since our investment in the company in 1997 and the success it has achieved duringour partnership with Mickey. With his leadership, combined with the support of TPG Capital  and Leonard Green & Partners, the Company will be well positioned for the long term. Weare looking forward to working with Mickey and his exceptional team and are excited by the prospect of continuing to expand the business.”Jonathan Sokoloff, Managing Partner of Leonard Green & Partners, said: “J.Crew occupiesa distinctive space in fashion retail and we are very pleased to partner with Mickey and TPGCapital for the next chapter of the Company’s growth. J.Crew’s strong brand equity and provenmultichannel strategy position the Company extremely well to expand its business, both in theU.S. and internationally.”Josh Weston, Chairman of the Special Committee of the J.Crew Board of Directors, stated:“After a thorough assessment, based on independent financial and legal advice, we concludedthis transaction will maximize value for shareholders. We are also pleased to have successfullynegotiated for J.Crew’s public shareholders a robust ‘go-shop’ provision that extends beyond theholiday season.”The investor group has secured committed financing from Bank of America Merrill Lynch andGoldman Sachs Bank USA.The agreement permits the Special Committee to solicit, receive, evaluate and enter intonegotiations with respect to alternative proposals through January 15, 2011. The SpecialCommittee, with the assistance of its independent advisors, will actively solicit alternative proposals during this period. There can be no assurance that this process will result in a superior offer. If there is no superior offer, the transaction is expected to close in the first half of fiscal2011, subject to customary approvals and closing conditions. Completion of the transactionalso requires approval by a majority of the outstanding J.Crew shares. J.Crew and the SpecialCommittee do not intend to disclose developments with respect to the solicitation process unlessand until the Special Committee and the Board have made a decision.The Special Committee was advised by an independent financial advisor, Perella WeinbergPartners LP, and an independent legal advisor, Cravath, Swaine & Moore LLP. Cleary GottliebSteen & Hamilton LLP is acting as legal advisor to J.Crew. Goldman, Sachs & Co. and Bank of America Merrill Lynch are acting as financial advisors to TPG Capital and Leonard Green &Partners. Ropes & GrayLLP is acting as legal advisor to TPG Capital and Latham & Watkins isacting as legal advisor to Leonard Green & Partners.  Conference Call Information  A listen-only call offering additional comments on third quarter results and this morning’stransaction announcement will be available to all investors starting at 11:00 AM Eastern Timethis morning. Callers may listen to this call by dialing (800) 642-1687, or (706) 645-9291 outsidethe U.S. and Canada, and by referencing conference ID 27737604. The listen-only call will also be webcast on the ‘Investor Relations’ section of the Company’s website at www.jcrew.com. Thelisten-only call will be available until November 30, 2010.  About J.Crew Group, Inc. J.Crew Group, Inc. is a nationally recognized multichannel retailer of women’s, men’s andchildren’s apparel, shoes and accessories. As of November 23, 2010, the Company operates 250retail stores (including 221 J.Crew retail stores, 9 crewcuts and 20 Madewell stores), the J. Crewcatalog business, jcrew.com, madewell.com and 85 factory outlet stores. Additionally, certain product, press release and SEC filing information concerning the Company are available at theCompany’s website www.jcrew.com.  About TPG Capital  TPG Capital is the global buyout group of TPG, a leading private investment firm founded in1992, with more than $48 billion of assets under management and offices in San Francisco,Beijing, Fort Worth, Hong Kong, London, Luxembourg, Melbourne, Moscow, Mumbai, NewYork, Paris, Shanghai, Singapore and Tokyo. TPG Capital has extensive experience with global public and private investments executed through leveraged buyouts, recapitalizations, growthinvestments, joint ventures and restructurings. TPG Capital invests in worldclass franchisesacross a range of industries, including past and present retail investments such as AmericanTire Distributors, Burger King, China Grand Auto, Daphne, Debenhams, Myer, Neiman MarcusGroup, PETCO Animal Supplies and Republic, among others.  About Leonard Green & Partners, L.P. Leonard Green & Partners is a leading private equity firm with over $9 billion in equity capitalunder management. Based in Los Angeles, Leonard Green & Partners invests in market leadingcompanies across a range of industries. Significant current retail investments include WholeFoods Market, Neiman Marcus Group, PETCO Animal Supplies, Leslie’s Poolmart, The SportsAuthority, The Container Store, Tourneau, David’s Bridal, Jetro Cash & Carry and The TireRack.  Forward Looking Statements:  Certain statements herein are “forward-looking statements” made pursuant to the safe harbor  provisions of the Private Securities Litigation Reform Act of 1995. Such forward-lookingstatements reflect the Company’s current expectations or beliefs concerning future events andactual results of operations may differ materially from historical results or current expectations.Any such forward-looking statements are subject to various risks and uncertainties, includingthe strength of the economy, changes in the overall level of consumer spending or preferencesin apparel, our ability to compete with other retailers, the parties’ ability to consummate the proposed transaction on the contemplated timeline, the performance of the Company’s productswithin the prevailing retail environment, our strategy and expansion plans, systems upgrades,reliance on key personnel, trade restrictions, political or financial instability in countrieswhere the Company’s goods are manufactured, postal rate increases, paper and printing costs,availability of suitable store locations at appropriate terms and other factors which are set forthin the Company’s Form 10-K and in all filings with the SEC made by the Company subsequentto the filing of the Form 10-K. The Company does not undertake to publicly update or revise itsforward-looking statements, whether as a result of new information, future events or otherwise.  Additional Information and Where to Find It:  This communication may be deemed to be solicitation material in respect of the proposedacquisition of J.Crew Group, Inc. by TPG Capital and Leonard Green & Partners, L.P. Inconnection with the proposed transaction, J.Crew Group, Inc. will file a proxy statementand file or furnish other relevant materials with the Securities and Exchange Commission.INVESTORS AND SECURITY HOLDERS OF J.CREW GROUP, INC. ARE URGED TOREAD CAREFULLY AND IN THEIR ENTIRETY ALL RELEVANT MATERIALS FILEDOR FURNISHED WITH THE SECURITIES AND EXCHANGE COMMISSION,INCLUDING THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE,BECAUSE THESE MATERIALS WILL CONTAIN IMPORTANT INFORMATIONABOUT THE PROPOSED TRANSACTION. Investors and security holders may obtain afree copy of the proxy statement (when available) and other documents filed or furnished to theSecurities and Exchange Commission by J.Crew Group, Inc. at the Securities and ExchangeCommission’s website at http://www.sec.gov or at J.Crew Group, Inc.’s website at http://www. jcrew.com and then clicking on the “Investor Relations” link and then the “SEC Filings” link.The proxy statement and other relevant materials may also be obtained for free from J.Crew
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