Brown Shoe To Acquire Bennett Footwear

Brown Shoe Company, Inc. (NYSE:BWS) announced today a definitive agreement to acquire Bennett Footwear Group, LLC, a private company majority-owned by Heritage Partners, Inc., for $205 million in cash, less indebtedness. In addition, the sellers may receive up to $42.5 million in earnout consideration upon the achievement of certain financial targets over the next three years.

Brown Shoe, based in St. Louis, owns and licenses such well-known footwear brands as Naturalizer, LifeStride, Bass, Dr. Scholl’s, Carlos by Carlos Santana and Buster Brown. Bennett, headquartered in Needham, Mass., owns and licenses such brands as Franco Sarto, Via Spiga, Etienne Aigner and Nickels Soft, among others.

“Bennett Footwear Group is the perfect fit for Brown Shoe,” said Brown Shoe Chairman and CEO Ron Fromm. “It represents a strategic complement to our company and, over the short- and long-term, we believe it provides us with several significant growth vehicles. With this acquisition, combined with our leading position in the moderate category, we become a more powerful force in the better women’s footwear segment, making us a much stronger Number 2 in the department store channel. In addition, Bennett’s position with the national chains augments our strength in that distribution channel, and Bennett also offers growth opportunities in specialty retailing, where we operate 375 stores.”

Peter Z. Hermann, Heritage General Partner, points to the benefits of Bennett joining forces with Brown Shoe. “We believe the industry, both retailers and wholesalers, is going to continue to consolidate. We have seen the beginnings of this in the past year. In this environment, the combination of Brown and Bennett makes great sense for both companies: Brown broadens its brand portfolio and Bennett gains scale in sourcing, significant retail capabilities, and access to the resources of an industry leader.”

Hermann also cited the Bennett investment as a compelling example of the power of The Private IPO®, Heritage’s unique equity recapitalization program. “The Bennett deal is a textbook example of Heritage’s approach: partner with a fantastic management team of a second generation family business, build a lot of value through add-on acquisitions, and help the business grow to a whole new level. The outcome here is an excellent one for Brown, the Bennett team and Heritage’s Limited Partners.”

Bruce Ginsberg, President and CEO of Bennett said, “I believe that Bennett has some of the best people in the women’s fashion footwear industry. Thanks to their hard work, we as a team have been able to accomplish all that we have. I also appreciate the partnership with Heritage. Their capital and experience helped us accelerate our growth and take advantage of important strategic opportunities.”

Legal counsel in this transaction for Brown was Bryan Cave LLP and for Heritage and Bennett it was Choate, Hall & Stewart and Seyfarth Shaw.

About Heritage Partners
Heritage Partners, a Boston-based private equity firm, specializes in private equity for family-owned businesses and closely-held companies.  Through its unique Private IPO^® structure, Heritage enables the owners of successful middle-market companies to realize significant liquidity from their businesses while maintaining a large equity investment and ongoing control of their business.  Heritage serves as an experienced strategic partner for such businesses as they seek to grow through acquisitions, organic business and operational improvements.  For more information, please see: www.heritagepartnersinc.com.

About Brown Shoe Company, Inc.
Brown Shoe (www.brownshoe.com) is a leading consumer-driven footwear company with both retail and wholesale operations. As a footwear retailer, the company operates nearly 1,300 retail shoe stores throughout the U.S. and Canada and five Internet retail sites. As a wholesaler, Brown Shoe markets and supplies branded, private label and licensed footwear to department stores, mass-merchandisers, independent and specialty stores. Brown Shoe’s footwear can be found in 23,000 retail doors.