francesca's® Announces Court Approval of Sale Process and Entry Into Stalking Horse Asset Purchase Agreement

Rhea-AI Summary

Francesca’s Holdings Corporation announced that the U.S. Bankruptcy Court has authorized an auction process under Chapter 11 bankruptcy. The company has entered a Stalking Horse Agreement with TerraMar Capital and Tiger Capital Group to sell its assets for approximately $17 million, subject to higher bids. The auction aims to maximize asset value and is set for January 13, 2021. Francesca’s continues operations through its network of approximately 553 boutiques across 45 states. This strategic move positions the company for potential long-term success amidst financial restructuring.

Positive

• Entered into a Stalking Horse Agreement with TerraMar Capital and Tiger Capital Group.
• Potential asset sale may stabilize the company with a minimum bid of approximately $17 million.

Negative

• Currently in Chapter 11 bankruptcy, indicating financial distress.
• Assets dependent on auction outcome; risks from potential lower bids.

Bids due on January 13, 2021 at 5:00 p.m. (prevailing Eastern Time)

Company Enters Into Stalking Horse Agreement With TerraMar Capital and Tiger Capital Group to Acquire Company as Going Concern, Subject to Higher and Better Offers

francesca’s^® Continuing to Serve Customers in the Ordinary Course

HOUSTON, Jan. 08, 2021 (GLOBE NEWSWIRE) -- Francesca’s Holdings Corporation (the “Company”) today announced that the U.S. Bankruptcy Court for the District of Delaware (the “Court”) has authorized francesca’s^® to conduct an auction process for the Company. The auction process is designed to achieve the highest and best offer for the Company’s assets and would be conducted under the Court’s supervision and in accordance with the U.S. Bankruptcy Code.

As previously announced, the Company entered into a Letter of Intent with TerraMar Capital, LLC (“TerraMar”), an investment firm that provides debt and equity capital to middle-market businesses, for TerraMar or an affiliate to become the stalking horse bidder for the auction and sale process. Today, the Company announced the execution of the stalking horse Asset Purchase Agreement (the “Stalking Horse APA”) with TerraMar’s affiliate, Francesca’s Acquisition, LLC, and with Tiger Capital Group, LLC (collectively, the “Buyers”). The Stalking Horse APA sets the minimum acceptable bid at the auction and will be subject to higher or better offers.

Under the terms of the Stalking Horse APA, the Buyers have agreed to purchase substantially all of the assets of the Company and its subsidiaries for approximately $17 million of cash, subject to certain adjustments, plus the assumption of substantial liabilities. The transaction is subject to the approval of the Bankruptcy Court and the satisfaction of customary closing conditions. It is also subject to higher or better offers in accordance with the bid procedures previously approved by the Bankruptcy Court, which require other bids to be submitted by January 13, 2021.

"We are pleased to announce the signing of a Stalking Horse Agreement with the Buyers and that the court has authorized us to proceed with the bid, auction and sale process. We are excited to partner with TerraMar, keeping us on track to position francesca’s^® for long-term success,” said Andrew Clarke, Chief Executive Officer of francesca’s^®.

“We are very excited to have reached an agreement with francesca’s^® and are enthusiastic for the strength of the brand and the future prospects for the business,” said Joshua Phillips, Managing Partner of TerraMar Capital.

On December 3, 2020, francesca’s^® and certain of its affiliates commenced its voluntary chapter 11 cases to reorganize under chapter 11 of the U.S. Bankruptcy Code. francesca’s^® has retained the services of O’Melveny & Myers LLP and Richards Layton & Finger, P.A. as bankruptcy counsel and FTI Consulting, Inc. and FTI Capital Advisors LLC as the Company’s financial advisor and investment banker. TerraMar Capital, LLC and Francesca’s Acquisition, LLC have retained the services of McDonald Hopkins LLC and Young Conaway Stargatt & Taylor, LLP as counsel. Tiger Capital Group provides asset valuation, advisory and disposition services to a broad range of retail, wholesale, and industrial clients.

Additional Information
Additional information about the proposed asset sale, as well as other documents related to the restructuring and reorganization proceedings, is available at https://cases.stretto.com/francescas.

About Francesca's Holdings Corporation
francesca's^® is a specialty retailer that operates a nationwide-chain of boutiques providing customers a unique, fun and personalized shopping experience. The merchandise assortment is a diverse and balanced mix of apparel, jewelry, accessories and gifts. As of today, francesca's^® operates approximately 553 boutiques in 45 states throughout the United States and the District of Columbia and also serves its customers through www.francescas.com and its mobile app. For additional information on francesca's^®, please visit www.francescas.com.

Company Contact:
Cindy Thomassee
832-494-2240
IR@francescas.com

FAQ

What is the recent announcement from Francesca's Holdings on January 8, 2021?

Francesca's Holdings announced an auction process authorized by the U.S. Bankruptcy Court under Chapter 11.

What does the Stalking Horse Agreement mean for Francesca's Holdings?

It sets a minimum bid of approximately $17 million for the company's assets, providing a baseline in the auction.

When are bids due for Francesca's Holdings auction?

Bids are due by January 13, 2021, at 5:00 p.m. Eastern Time.

Who are the Buyers for Francesca's Holdings assets?

The Buyers are TerraMar Capital and Tiger Capital Group.

How many boutiques does Francesca's operate?

Francesca's operates approximately 553 boutiques across 45 states.