Bed Bath & Beyond to Acquire Cost Plus

In a deal worth $22 a share, Bed Bath and Beyond's

recent acquisition of Cost Plus

for about $495 million in cash substantially increases the company's offerings. The agreement gives Bed Bath & Beyond an additional 259 stores, which also include the locations World Market, Cost Plus Imports, and Cost Plus World Market Locations. Cost Plus is a discount chain that sells a variety of products including furniture for the home, gourmet food, accessories, and wine at low prices. After recovering from the brink of a devastating financial crisis in 2009, in which shares were traded for less than $1, sales were able to make improvements towards the end of the last fiscal year, allowing the company to yield profits. Since its creation in 1971, Bed Bath and Beyond offers a wide selection of domestic merchandise, particularly for the bedroom, bathroom, kitchen, and dining room. Compared to Cost Plus, Bed Bath and Beyond has proven to be more financially effective. It has increased sales since the recession while keeping overhead costs stable and has since reported higher profits. This success through the recession is largely a result of the liquidation of Linens N Things, which has created fewer retail competitors for the company. Two of the largest shareholders of Cost Plus, Red Mountain Capital Partners and Stephens Investment Holdings, together owning 26% of interest, have backed the deal, which is expected to close at some point during Bed Bath and Beyond's second fiscal quarter, which ends in August. It is also projected to add to Bed Bath and Beyond's per-share earnings for fiscal 2012 after integration costs. No job cuts or store closures are expected. Shares of Bed Bath & Beyond are currently trading almost flat near $68. Cost Plus shares are up a bit more than 20% trading near $21.90.