Mill Road Capital, Blackstone complete R.G. Barry take-private

Mill Road Capital and The Blackstone Group have completed the take-private of R.G. Barry Corporation, which makes accessories and other products. R.G. Barry is now 50 percent-owned by Mill Road, which first invested in the company in 2008, and 48 percent-owned by Blackstone through its Tactical Opportunities business.

Press Release

Mill Road Capital (“Mill Road”), a private investment firm focused on investing in publicly traded micro-cap companies, and funds affiliated with Blackstone Tactical Opportunities (“Blackstone”), today announced the completion on September 3, 2014 of the going private transaction contemplated by the previously announced Agreement and Plan of Merger, dated May 1, 2014 involving the acquisition of R.G. Barry Corporation (“R.G. Barry” or the “Company”) by affiliates of Mill Road Capital and Blackstone. As a result of the merger, R.G. Barry will become a private company and, as of today, its common shares (NASDAQ: DFZ) will no longer be publicly traded.

Mill Road Capital initially took a position in R.G. Barry’s common shares in January 2008. Over the years leading up to Mill Road’s September, 2013 offer to acquire 100% of R.G. Barry, Mill Road had accumulated 1,093,189 shares of R.G. Barry, an approximately 9.8% ownership stake.

Blackstone is participating as an equity investor in the transaction alongside Mill Road Capital. R.G. Barry is now approximately 50%-owned by Mill Road Capital and 48%-owned by Blackstone, with the remaining 2% held by a consortium of institutional investors.

Scott Scharfman, a Managing Director of Mill Road Capital, stated, “We have been a public shareholder of R.G. Barry for many years, and are excited to welcome the new privately-held R.G. Barry to the Mill Road family. We look forward to working with the great team at R.G. Barry and with Blackstone to start an exciting new chapter in R.G. Barry’s history.”

Naveen Bhatia of Blackstone Tactical Opportunities added, “We believe that under a new, private ownership structure, R.G. Barry can be more flexible and will be better able to implement and execute its long-term strategic plan, including its ongoing acquisition efforts, in order to build value for the future. We are pleased to collaborate with the terrific team at Mill Road Capital in this transaction and with the first-rate management team and associates of R.G. Barry in the next phase of growth of the Company.”

“This is a great outcome for our public stockholders and for R.G. Barry,” said Greg Tunney, R.G. Barry’s President and Chief Executive Officer. “Whether it is developing and improving our existing brands or adding new accessory labels to our portfolio, our agility, access to capital and sense of immediacy has multiplied many times today with the tremendous resources and expertise available to us from our new investors Mill Road and Blackstone.”

Under the terms of the Merger Agreement, which was approved by R.G. Barry’s shareholders at a special meeting held on September 3, 2014, each of R.G. Barry’s common shares has been cancelled and converted into the right to receive $19.00 in cash, without interest and less any applicable withholding taxes, except for shares held by (i) R.G. Barry and certain affiliates of Mill Road or their subsidiaries, or (ii) a shareholder who has demanded, perfected and not withdrawn or otherwise lost such holder’s demand for appraisal under Ohio law. R.G. Barry shareholders of record as of the effective time of the merger that are entitled to receive such consideration for their shares will receive a letter of transmittal and instructions on how to surrender their share certificates in exchange for the merger consideration; shareholders should wait to receive the letter of transmittal before surrendering their share certificates.

In addition to de-listing from the NASDAQ Global Select Market, R.G. Barry has filed a Form 15 with the SEC, terminating its public reporting obligations under the Securities Exchange Act of 1934, as amended. As a result, R.G. Barry is no longer required to file certain reports and forms (including Form 10-K, Form 10-Q and Form 8-K) with the SEC.

Golub Capital arranged the debt financing in support of the merger. Katten Muchin Rosenman LLP provided legal counsel to Golub Capital. Mill Road Capital was advised by Foley Hoag LLP, its legal counsel. Blackstone was advised by its legal counsel, Paul Hastings LLP. R.G. Barry was advised by Peter J. Solomon Company, L.P., its financial advisor, and Vorys, Sater, Seymour and Pease LLP, its legal counsel.

About Mill Road Capital

Mill Road Capital is a private investment firm focused on investing in and partnering with publicly traded micro-cap companies in the U.S. and Canada. The firm has flexible, long-term capital with the ability to purchase shares in the open market, buy large block positions from existing shareholders, provide capital for growth or acquisition opportunities, or execute going-private transactions. The firm has raised approximately $670 million of aggregate equity capital commitments. More information can be found at http://www.millroadcapital.com.

About Blackstone

Blackstone’s Tactical Opportunities business employs an opportunistic, multi-asset class investment strategy focused on special situations investments. Tac Opps seeks to invest globally in opportunities throughout the capital structure. The strategy leverages the deep synergies and experience that exist across Blackstone’s leading alternative asset and advisory platform to generate attractive opportunities.

Blackstone is one of the world’s leading investment firms. We seek to create positive economic impact and long-term value for our investors, the companies we invest in, and the communities in which we work. We do this by using extraordinary people and flexible capital to help companies solve problems. Our asset management businesses, with almost $300 billion in assets under management, include investment vehicles focused on private equity, real estate, public debt and equity, non-investment grade credit, real assets and secondary funds, all on a global basis. Blackstone also provides various financial advisory services, including financial and strategic advisory, restructuring and reorganization advisory and fund placement services. Further information is available at www.blackstone.com. Follow Blackstone on Twitter @Blackstone.

About R.G. Barry

R.G. Barry creates and markets great accessories brands and fashionable, solution-oriented products that make life better. Its primary brands include: Dearfoams slippers (dearfoams.com); baggallini handbags, totes and travel accessories (baggallini.com); and Foot Petals premium insoles and comfort products (footpetals.com). To learn more, please visit rgbarry.com.

SOURCE R. G. Barry Corporation

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