Shares of struggling diamond retailer Zale (ZLC) are up 10 cents, or 3%, in after-hours trading at $3.10 after the firm reported this afternoon it got $150 million five-year senior secured term loan from private equity firm Golden Gate Capital. Golden also took warrants to purchase up to 25% of the company’s common stock.
The deal confirms a report in the New York Post last week and a piece by Bloomberg back on April 21.
Zale said it also secured a new bank credit facility in two tranches, totaling $650 million, $50 million more than the total commitment in the credit line before.
“With the completion of our financial restructuring, we will now be able to focus 100% of our time on key merchandising, in-store and marketing initiatives to grow sales and return to profitability,” said CEO Theo Killion.
The new financing follows on stories by the NY Post and Bloomberg back in early April saying that along with Golden Gate, private equity firms Texas Pacific Group and Centerbridge Partners were vying for a stake in the business.
Last week’s Post article noted that Golden Gate isn’t interested in buying Zale, citing anonymous sources.
Zale in late February reported revenue down 14%, year over year, but still managed to beat analysts’ estimates, delivering its first quarterly profit in two years.
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