Lerner New York/New York by Bear Stearns –

Bear Stearns acquired Lerner New York/New York from Limited Brands Inc. for $153.5 million. Upon completion of the deal, the acquired company changed names, becoming New York & Company.

If it’s true that the only number in retail is the bottom line, then Bear Stearns made a good move purchasing the women’s clothier. The cost to Bear was roughly half what Limited paid in 1985 for the retailer.

At closing, Limited received $78.5 million in cash, $75 million of seller-subordinated debt and warrants for 15% of the common equity.

CapitalSource contributed $20 million in mezzanine financing and CIT and Congress Financial led senior funding.

According to John Howard, senior managing director at Bear Stearns’ Merchant Banking Group, the firm is in the unusual position of achieving positive results with minimum risk.

“At closing, there is virtually no debt other than the mezzanine financing,” he said.

“With significant debt capacity and ample cash flow to fund store expansions, we have the ability to undertake a massive growth program…it’s a low-risk strategy,” Howard added.

Lerner’s current management, in place for the last six years, will receive “the attention and sunlight they need to succeed in the future,” according to Howard.