KNOXVILLE, Tenn. (AP) _ Goody's Family Clothing Inc. said Monday the department store chain has reached a definitive agreement to be acquired by an affiliate of private-investment firm Sun Capital Partners Inc. in a deal worth nearly $273 million.
The parties last week agreed in principle to the proposal to pay $8 a share for Goody's.
Chairman and Chief Executive Robert M. Goodfriend and his family, who together own about 42 percent of Goody's shares, previously agreed to the Sun Capital terms.
Goodfriend, son of the company's founder, has run Goody's since 1972. He will leave the company.
``The Board unanimously approved the transaction, taking into account the challenges facing the company, the high likelihood of closure of this transaction and the highly conditional nature of other alternatives,'' Goodfriend said in a statement.
``I have spent most of my life with the Goody's organization and have a great passion for this company and its people,'' he said. ``I move forward with this transaction with confidence that the new ownership team will maintain Goody's high level of commitment to its customer, employee and vendor constituencies.''
The moderately priced clothier operates 368 stores in 20 states in the South and Midwest and has about 11,000 employees.
Sales at the company, which reported $1.2 billion in revenue in 2004, have been declining after Gulf Coast hurricanes temporarily closed six of it stores and amid higher gasoline costs. It has said it expects to report a net loss for the third quarter.
It was not clear when the deal would be completed, and officials with Goody's did not immediately return a call seeking further comment.
Officials with Boca Raton, Fla.-based Sun Capital did not immediately return a call seeking comment. Sun Capital's main business is leveraged buyouts and investments.
Two investment firms holding shares _ GMM Capital LLC and Prentice Capital Management LLC _ expressed interest in acquiring Goody's for a higher price per share. But Goody's negotiated only with Sun Capital, Goodfriend said.
``The company has recently received two unsolicited proposals during our exclusivity period with Sun Capital Partners. However, these proposals were received prior to the proposing parties having had an opportunity to review the agreement we are announcing today,'' he said.
Goody's stock was down 36 cents, or 4 percent, to $8.39 during morning trading on the Nasdaq.
Goody's stores are located in Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Virginia and West Virginia.