True Religion Sells Out

True Religion is selling out.

On Friday, the Vernon, Calif.-based jeans maker announced that it has signed an agreement to be acquired by private equity firm TowerBrook Capital Partners L.P. in a transaction valued at $835 million.

TowerBrook has made similar investments in the past, and has a special interest in high-end fashion brands, having made "control-oriented investments" in companies including Jimmy Choo, Odlo, BevMo! and Phase Eight in the past.

Assuming that shareholders approve the deal, TowerBrook will pay $32 cash for each share of True Religion outstanding, a price the company' board says is 52% above where the shares traded back on October 9, just before it announced it was seeking a buyer.

The purchase price on offer values True Religion at about 1.7 times sales, and 17.6 times earnings -- somewhat short of the valuations at rival firms such as PVH Corp. and V.F. Corporation Yet, even so, investors today bid up the shares by only 8.1%, to $31.82 -- a price just short of TowerBrook's offer, and indicative of lack of belief that a better bid will emerge.

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