Endeavor Acquisition Corp. announced that its stockholders have approved the merger with American Apparel and its affiliated companies. The vote to approve the merger took place at Endeavor's special meeting of stockholders. The closing of the transaction took place immediately thereafter. Endeavor has changed its name to American Apparel, Inc.
In connection with the closing of the acquisition, Endeavor will issue approximately 37.3 million shares to one of American Apparels stockholders, Dov Charney, and pay cash of approximately $67.9 million to the other stockholder. Approximately 8 million Endeavor shares issued in the transaction will be placed in escrow as a fund for any indemnification rights Endeavor may have in connection with the transaction. Approximately $2.5 million aggregate amount of cash bonuses also will be paid to certain current American Apparel employees.
American Apparel also will repay certain insider loans as described in the definitive proxy statement, dated November 28, 2007. Immediately prior to closing, American Apparel will distribute an aggregate of approximately $15.8 million to American Apparel, Inc.s existing stockholders in connection with their personal income tax responsibilities for 2006 and for 2007 through the date of closing. In the notes to the pro forma financial information contained in the definitive proxy statement, the company stated that, as of September 30, 2007, the amount owed for such distribution was $3.917 million. When this amount was recalculated under the applicable terms of the acquisition agreement, it was determined to be $13.5 million as of September 30, 2007, which amount is included in the aforementioned $15.8 million aggregate distribution. In addition, such $15.8 million aggregate distribution includes amounts to be distributed with respect to income earned after September 30, 2007.
