rue21 Acquired by Apax Partners, Shares Surge

This morning rue21 RUE, inc. was acquired by private equity firm Apax Partners. Shares will be acquired for $42 each, bringing the total near 1.1 Billion, meaning the EBITDA is near 11. rue21 will take the next 40 days to seek a better acquisition deal and will need to pass a vote by shareholders before closing with Apax.

For the 2013 fiscal year ended February 2nd, Rue21 had sales of 902 million, an 18.6 percent growth from the previous year. This accompanies a 19.8 percent sales growth from the year prior. Net income has also been a steady rise, nearly doubling over the past three years.

With the acquisition news, rue21 also released some preliminary quarter one results. Net sales rose 9 percent for the quarter with same store sales rising 4.6 percent. EPS will land around $0.44 per share. The company did note that the quarter was tougher than expected and hopes to pick up sales growth to pick up in the second quarter.

Shares of RUE are up over 23 percent in the premarket to $42.08. One can expect share prices to stay around this level as Apax Partners plans to buy shares for $42.