Upcoming AWS Coverage on Shoe Carnival Post-Earnings Results

LONDON, UK / ACCESSWIRE / December 21, 2016 / Active Wall St. blog coverage looks at the headline from leading designer and retailer of maternity apparel, Destination Maternity Corp. (NASDAQ: DEST) ("Destination") as the Company announced along with Orchestra Premaman S.A. ("Orchestra"), on December 20, 2016, a merger where, they have entered into a definitive agreement to build a unified provider of maternity apparel, baby hard goods, and children's wear. With revenue estimates amounting to $1.1 billion, this merger is expected to offer greater value to the respective shareholders. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

One of Destination Maternity's competitors within the Apparel Stores space, Shoe Carnival, Inc. (NASDAQ: SCVL), reported on November 28, 2016, results for the third quarter ended October 29, 2016. AWS will be initiating a research report on Shoe Carnival in the coming days.

Today, AWS is promoting its blog coverage on DEST; touching on SCVL. Get all of our free blog coverage and more by clicking on the links below:

http://www.activewallst.com/registration-3/?symbol=DEST

http://www.activewallst.com/registration-3/?symbol=SCVL

Breaking down the Merger

According to the Agreement, Destination's shareholders will be offered 0.5150 of 1 Orchestra's ordinary share for each Destination's common stock they hold. Considering the Orchestra's closing stock price of $5.26 on May 31, 2016, the implied offer price of $7.05 represents a 34.00% premium. Destination's shareholders will own a 28% stake in the combined venture, whereas Orchestra's shareholders will hold the majority share with approximately 72% at their disposal, subject to execution of the merger. The transaction will be dealt in stock-for-stock and will most probably be tax-free to shareholders.

The Companies

Destination Maternity is a leading retailer and designer of maternity apparels and children's wear. Based in Moorestown, New Jersey, Destination operates more than 1,229 retail locations across the US, Canada, England, and Puerto Rico. The locations comprise of 526 retail stores and 703 leased department locations. Destination additionally boasts a worldwide presence, including the Middle-East, Mexico, Israel, Korea, and India, with about 239 franchised locations.

Orchestra is a specialty firm dealing in child clothing and products business. Based in, France, Orchestra has established itself as a major player in the European Childcare Product Market. The firm operates in more than 40 nations and reportedly sells more than 80 million units per year.

Declined proposal finally accepted

This merger is not the first instance when Orchestra entered into negotiation with Destination. Previously, on December 14, 2015, Orchestra indicated that it owned 13.3% of the Destination's outstanding stocks. Orchestra initially made a non-binding proposal to acquire Destination for a stock-to-stock transaction. However, Arnaud Ajdler, Destination's Chairman of the Board speculated revenue synergies as the primary reason to call off the agreement. He stated that the stock merger proposal could risk the investment of the shareholders and comes with inherent risks.

A Strategic merger

The children's apparel market is presumed immune from economic fluctuations. Destination and Orchestra seemingly plan to bank on the never-ending opportunities the segment offers. Obviously, a monopoly into the segment would ensure greater valuation and elevated returns. Hence, these complementary ventures aspire to create numerous operational and financial benefits through the execution of this merger. The combined venture is set to save annual costs amounting to $15-20 million by leveraging Orchestra's direct sourcing network. Destination boasts of a unified and seamless retail distribution infrastructure in the US and will seemingly offer Orchestra to tap into the world's largest, and probably the most profitable, market of the world. The transaction is expected to be accretive to both margins and EPS, and will probably elevate the cash-flow and set the combined venture on the path to growth.

Stock Performance

On Tuesday December 20, 2016, Destination Maternity's share price finished yesterday's trading session at $5.90, tumbling 15.95%. A total volume of 1.24 million shares exchanged hands, which was higher than the 3 months average volume of 79.96 thousand shares. The stock currently has a market cap of $80.83 million.

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SOURCE: Active Wall Street