Perry Ellis International Inc. PERY 0.87% agreed to go private in a deal valued at $437 million, four months after George Feldenkreis, the founder and former executive chairman, made a bid for the apparel company.
A newly formed entity controlled by Mr. Feldenkreis will acquire the Perry Ellis shares for $27.50 each. The offer represents a premium of 21.6% to the company’s share price Feb. 5, the last day before the proposal from Mr. Feldenkreis.
The share price had advanced since his offer was made public four months ago in anticipation of a potential sweetened offer, closing Friday at $27.97.
Mr. Feldenkreis and his son Oscar, the company’s current CEO, are two of the company’s biggest investors. Together, they owned an 18% stake as of last month, according to regulatory filings.
The Perry Ellis board unanimously approved the deal based on a recommendation from a special committee that formed after Mr. Feldenkreis made his approach. Following completion of the transaction, which is expected during the second half of the year, Oscar Feldenkreis will continue to lead Perry Ellis. The elder Mr. Feldenkreis will return to an active management role.
While the deal is pending, Perry Ellis International and George Feldenkreis agreed to defer the next annual meeting for director elections. Last month, he nominated four people to the board, son Oscar and three external candidates.
Financing of the transaction will take place through a senior secured asset -backed revolving loan facility, a $282 million term financing facility provided by Fortress Credit Advisors LLC and equity provided by the Feldenkreis family. George Feldenkreis had worked with private-equity firm Fortress Investment Group LLC on the bid for Perry Ellis.
The agreement to go private is the culmination of years of discussion over the future of Perry Ellis, one of many struggling department-store brands. As far back as 2014, activist investor Legion Partners—which no longer has a stake in the company—pushed for changes that included exploring a sale and launching a fight to change the board.
PJ Solomon served as financial adviser to the Perry Ellis special committee. Scope Advisors LLC acted as financial adviser for the group led by George Feldenkreis.
Write to Lisa Reynolds at lisa.reynolds@wsj.com