Horsham firm to pay $565M for online retailers

Capmark Financial Group Inc., the Horsham company that was formerly General Motors Acceptance Corp.'s commercial  mortgage business, says it has agreed to buy Bluestem Brands, Inc., the Eden Prairie, Minn. company that operates the online and direct-mail retailers Fingerhut and Gettington.com, which specialize in lower-income consumers, plus Bluestem's PayCheck Direct employee-purchase system, for $565 million in cash.

As part of the deal, Steve Nave, Bluestem's Chief Executive Officer, will become Capmark's new CEO and a director. Capmark's present CEO Bill Gallagher and chief operating officer Tom Fairfield will continue to manage Capmark's remaining commercial finance assets, while Gene Davis will remain Executive Chairman. Centerbridge Partners LP, which agreed to invest in Capmark in May, will name some other directors for the board.

In a statement, Davis called the Bluestem and Fingerhut deal "another step in (Capmark's) continuing efforts to maximize value for shareholders." Fairfield was not immediately available for comment on the impact of the deal on Capmark's remaining Horsham employees. 

The payment price will be supplied partly by Bluestem managers, partly by investor Centerbridge Partners LP 'thorugh the exercise of warrants," and partly through $300 million to be borrowed by Bluestem from Credit Suisse and Jefferies Finance LLC. U.S. Bank N.A. will give Bluestem a new $80 million asset-based lending facility.

Capmark says it will tell investors more about the changes in a Sept. 30 conference call at 3 p.m., details at www.capmark.com on the "Investor Relations" button.  Investment bank Houlihan Lokey Capital Inc. and law firm Kramer Levin Naftalis & Frankel LLP advised Capmark; Lazard Middle Market and by its counsels Skadden Arps Slate Meagher & Flom LLP and Faegre Baker Daniels LLP advised Bluestem; Jefferies advised Centerbridge; both Centerbridge and Capmark were also advised by lawyers at Weil Gotshal & Manges LLP.