Bye-Bye, Stock Market: Companies Going Private in 2014

Before you go, we thought you'd like these...
Before you go close icon
Stew Milne/AP
Considering that it's largely a brick-and-mortar retailer in a world that's buying more goods online, PetSmart (PETM) has posted some very good fundamentals recently. Given that, it might be a tempting stock for an investor to own. But it's not going to be on the market much longer.

Under pressure from some of the private equity firms that own big chunks of it, the company has solicited bids for a sale, which will end its time as a stand-alone, publicly traded entity. Its venture into private waters is the latest in a series of such deals so far this year. Here's a look at several other companies that took (or are taking) themselves off the market in 2014.

CEC Entertainment

Even during its time on the high-visibility New York Stock Exchange, CEC Entertainment was not a familiar name. But the company's key property, the Chuck E. Cheese chain of hyperactive-themed restaurants aimed at kids, has been a well-known brand for years.

That might be why CEC Entertainment and financial adviser Goldman Sachs (GS) were able to find a wealthy buyer so quickly after announcing their intention to go private this past January. A mere week after that came to light, investment management firm Apollo Global Management (APO) offered $950 million plus roughly $370 million in debt assumption for the company.

As that offer represented an amount 25 percent or so higher than the stock's most recent closing price, CEC Entertainment readily accepted, and the deal closed in February.

The company is probably better off in Apollo's arms. Chuck E. Cheese's one-stop dining and entertainment model is looking a bit creaky next to the many options for fun available to 21st-century kids. At the time of the deal's announcement, the company's results were sagging, with sales and net profit both declining in recent periods.

Going private -- well, semi-private, as Apollo is a publicly traded entity -- reduces the pressure for the company to return to growth right away, and gives it a chance to restructure Chuck outside of the immediate glare of the stock exchange.

The Jones Group

Similarly to CEC Entertainment, the Jones Group is a relatively obscure name that holds recognized assets, namely mall fashion stalwarts Nine West and Anne Klein.

It was struggling to get those clothes and accessories on customers, however. Sales were slumping, its stock price was heading south, and debt was high. The company decided to rectify these problems by selling itself.

With the help of its financial adviser, Citigroup (C), it found a buyer in New York-based private equity concern Sycamore Partners. Sycamore agreed to pay $1.2 billion for the company and take on $1 billion in debt. The acquisition was completed in April.

This is familiar territory for the new owner. Among other deals, Sycamore had previously grabbed control of women's clothing specialist Talbots for $391 million in 2012 and youth-focused apparel purveyor Hot Topic in a roughly $600 million deal the following year.

In June, Sycamore announced its intention to chase after another young brand, Express (EXPR). The private equity operator had a nearly 10 percent stake in the company at the time; news of its interest lifted Express' stock price by over 20 percent, giving the retailer a market value of over $1.1 billion.


Software company Tibco (TIBX) is a hardy survivor of the crazed stock frenzy of the late 1990s. These days, the company provides its services to big-name companies like Southwest Airlines (LUV) and Citigroup.

Unlike many of its vanished peers, Tibco has been consistently profitable. That bottom line has been choppy lately, however -- after netting $112 million in fiscal 2011 and $122 million the following year, the company posted a net profit of $84 million in 2013. Net income across the most recent two quarters has been significantly lower than in the preceding periods.

This didn't escape the market's notice. As of late September, the company's stock price was down by around 17 percent from its year-to-date peak.

So it was a good time for an interested party to make a deal. At that point, Tibco hanged a "sold" sign on its door, announcing that it had inked a $4.3 billion deal with professional tech investment house Vista Equity Partners. The arrangement, which includes the assumption of net debt, works out to a roughly 26 percent premium over its most recent closing share price.

Motley Fool contributor Eric Volkman has no position in any stocks mentioned. The Motley Fool recommends Goldman Sachs, PetSmart and Tibco Software, and it owns shares of Citigroup. Try any of our Foolish newsletter services free for 30 days. To read about our favorite high-yielding dividend stocks for any investor, check out our free report.

7 Best Things to Buy in November
See Gallery
Bye-Bye, Stock Market: Companies Going Private in 2014
"November is the month where everybody buys a turkey, but that doesn't mean there are not turkey deals to be had," notes Charles Tran, founder of, which focuses on saving consumers money. Tran says that consumers can expect low prices on turkeys as retailers try to get you to walk in their doors instead of their competitors'. "Many supermarkets will offer promotions to reward customers with a free or discounted turkey if they spend a minimum amount."
Yep, we've officially reached the month of Black Friday and Cyber Monday. This may send you into a nervous frenzy, or it could have you eager to hit the stores at 5 a.m. come Nov. 29. Either way, start preparing to get the best deals this season. Step 1: Sign up for your favorite online retailers' newsletters and subscribe to their social media feeds to gain access to insider deals. Step 2: For brick and mortar stores, pick up Sunday newspapers each weekend and explore stores in advance to make note of current prices and store layouts.
November isn't a popular month for brides to shop gowns and other wedding necessities. As such, retailers are eager to host promotions that stir up sales. "We've seen discounts on wedding dresses and supplies ranging from 10 percent to 25 percent off," notes Tran. 
November and December are two months that families traditionally spend a lot of time in the kitchen. For this reason, retailers often feature cookware, silverware and serving supplies in printed and online advertisements, TV commercials and store displays. To draw you into the store, they put these items on steep discount. If you need to replace anything in your kitchen -- or if you need to stock up before the holidays -- November is the best month to do so.
Speaking of the kitchen, if you need a new dishwasher, refrigerator, washer or dryer, November is an excellent month to buy one. "Many large-appliance manufacturers release new models in September and October," explains Tran. "Shop last year's models to get some of the best deals on large appliances in early November." He says that the selection may be limited, but impressive deals can be found.
November is an excellent time to stock up on Blu-Ray movies for your own collection or as gifts. "We've seen deals on online retailers for as low as $3," says Tran. Now that's a bargain.
Holiday gift sets make for excellent presents, but they're also an ingenious way to get more for your money. Cosmetic brands and perfumers often release limited edition collections that pack impressive value into one low cost. In addition to buying as gifts, consider picking up one or two gift sets that include items you use for you.
Read Full Story

People are Reading