Golden Gate Capital has completed the acquisition of Pacific Sunwear of California, and all of its subsidiaries (collectively, called PacSun).
PacSun concluded its restructuring after completing all necessary actions and meeting all closing conditions to its Joint Plan of Reorganisation.
This plan was confirmed by the United States Bankruptcy Court for the District of Delaware on 6 September.
PacSun had filed for Chapter 11 bankruptcy five months ago.
PacSun has significantly restructured and cut down its long-term debt and annual occupancy costs, in addition to improving its capital structure.
As per the plan, Golden Gate Capital has converted more than 65% of its term loan debt into the equity of the reorganised company and has offered a minimum of $20m in additional capital to the reorganised retailer to support its long-term growth objectives.
Wells Fargo has also offered a five-year $100m revolving line of credit.
PacSun president and CEO Gary H. Schoenfeld stated: “We thank Golden Gate Capital for their partnership, which enabled PacSun to navigate the restructuring process in only five months, and we look forward to continuing our strong working relationship as we embark on our next chapter.”
Golden Gate Capital managing director Josh Olshansky said: “PacSun offers consumers the most compelling and desirable mix of brands celebrating the California lifestyle.
"Now, with a strengthened balance sheet, reduced long-term debt and reduced annual occupancy costs, the company is well-positioned to build a stronger future and achieve long-term success.”
Guggenheim Securities served as investment banker for PacSun and Klee, Tuchin, Bogdanoff & Stern LLP as legal counsel with regard to debt restructuring, and RCS Real Estate Advisors as real estate advisor.
FTI Consulting has served as its restructuring advisor.
Perella Weinberg Partners served as financial advisor for Golden Gate Capital, and Kirkland & Ellis as legal counsel. Choate Hall & Stewart LLP served as Wells’ legal counsel.
PacSun, which has 583 stores in all the 50 states of the US and in Puerto Rico, sells branded and proprietary casual apparel, accessories and footwear.
Image: The PacSun building. Photo: courtesy of Mikographer and Wikipedia.