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Toys R Us Chain Sold to Investor GroupPOSTED March 17, 2005 Toys R Us, the largest chain of toy stores in the country, has agreed to sell its global business to an investment group consisting of affiliates of Kohlberg Kravis Roberts & Co. (KKR), Bain Capital Partners LLC, and Vornado Realty Trust. The deal includes the company's Toys R Us stores and Babies R Us stores. Under the terms of the agreement, the investment group will acquire all of the outstanding shares of Toys R Us, Inc. for $26.75 per share, representing a transaction value of $6.6 billion plus the assumption of debt. Each of the investors will own equal stakes in the company upon completion of the transaction. Currently, the company sells merchandise through 1,500 stores, including 681 toy stores in the U.S. and 601 international toy stores, including licensed and franchise stores as well as through its Internet sites at www.toysrus.com, www.imaginarium.com and www.sportsrus.com. The websites are operated in a partnership with Amazon.com. Babies R Us is the largest baby product specialty store chain in the world and a leader in the juvenile industry, and sells merchandise through 218 stores in the U.S. as well as on the Internet at www.babiesrus.com. John Eyler, Chairman and Chief Executive Officer of Toys R Us, said, "We are pleased to announce this transaction, which brings our strategic review to a very successful conclusion. There was competition among bidders during the review process, and the acquisition price reflects the compelling value of the global Toys R Us and Babies R Us operations and assets." Once the largest toy seller in the nation, Toys R Us has seen its business erode from fierce competition from industry mega-giant Wal-Mart and Target stores. According to the NY Times, in 1993 Toys R Us had 21% of the nation's toy retail business while Wal-Mart had 11%. Last year, Wal-Mart grew its toy business to 25% while Toys R Us market share fell to 17%. Toys R Us has a flagship store in Manhattan's Times Square. Another location in Union Square closed after Christmas. The company employs 65,000 workers and is headquartered in Wayne, NJ. KB Toys, a chain of smaller mall-based toy stores, announced in January that it would file for bankruptcy protection. |
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