Neiman Marcus, Molex sell for billions

Luxury merchant Neiman Marcus is getting a new owner and so is electronic components and cables maker Molex in deals announced Monday totaling more than $13 billion.

Ares Management and Canadian Pension Plan Investment Board said they are buying the Neiman Marcus chain, which operates 79 stores, for $6 billion.

Koch Industries Inc. is buying Molex for $7.2 billion.

The two new owners in Neiman Marcus will hold an equal economic interest, and the company’s management will retain a minority stake.

“We plan on investing meaningful capital into the business to ensure Neiman’s long-term position as the unparalleled leader in luxury retail,” said David Kaplan, senior partner and co-head of the private equity group of Ares.

The deal, which is expected to be finalized in the fourth quarter, would end control of the luxury retailer by private equity firms TPG Capital and Warburg Pincus.

They bought the company for $5.1 billion in 2005 during the booming luxury years.

The luxury market is showing signs of a slowdown. Consulting firm Bain & Co. predicts luxury sales will be up 5 percent to 7 percent in the Americas this year, down from 13 percent growth in 2012.

Neiman Marcus, founded in 1907 by Herbert Marcus Sr., his sister Carrie Marcus and her husband A.L Neiman, has had a series of owners during its rich history.

Koch — run by billionaire brothers Charles and David — said Monday it will pay $38.50 per Molex Inc. share. That’s a 31 percent premium to the company’s common stock price of $29.34 on Friday.

The companies put the deal’s total value at $7.2 billion when stock options and restricted stock for Molex are added to the valuation of its outstanding shares.

Molex will keep its headquarters in Lisle, Ill., and retain its management team and company name, but will run as a Koch subsidiary.

Koch, based in Wichita, Kan., owns a variety of businesses, including the paper and paper products maker Georgia-Pacific, an oil refinery and chemicals company, pipeline company, cattle company, fertilizer company and commodity trading and services companies. It has annual sales of $115 billion.