FINISH LINE TO ACQUIRE GENESCO FOR $1.5 BILLION

Specialty retailer Finish Line agreed to acquire Genesco for $1.5 billion. The deal calls for Finish Line to pay Genesco stockholders $54.50 a share. It is subject to approval by Genesco shareholders and regulatory approval.

Finish Line, that operates mall-based stores Finish Line, Man Alive and Paiva, hopes to expand their footwear and headwear presence. Nashville-based Genesco sells footwear, headwear and accessories in over 2,050 retail stores in the U.S. and Canada
(Hat World, Lids, Journeys, Johnston & Murphy and Underground Station).

"Obviously this is a transforming event for our company," said Alan Cohen, Finish Line's chief executive. "There will be a lot of new growth opportunities with the many successful banners Genesco has been able to create and grow...it gives it a strong positioning across multiple categories."

The deal is expected to generate $15 million to $20 million in annual cost savings the first year of operations, including integration costs from shared administrative services, increased scale in purchasing, marketing and advertising, sourcing and logistic efficiency. Finish Line doesn't expect the deal to results in significant work-force changes.

“Genesco and The Finish Line share similar philosophies that promote a strong team culture and the spirit of creativity. These value systems, which have long distinguished our companies, will continue to define the next chapter of our history together,” said Genesco CEO Hal Pennington

Genesco rejected a deal from Foot Locker for $51.00 per share. Upon completion Genesco will become a subsidiary of Finish Line. The company will be headquartered in Indianapolis and will maintain Genesco's operations in Nashville.

From MarketWatch