VERNON, Calif. (AP) -- True Religion Apparel, best known for its high priced denim, has agreed to a buyout offer of about $826 million from the investment management firm TowerBrook Capital Partners LP.
The announcement Friday comes seven months after True Religion said it was exploring strategic options. Like many high-end jean companies, True Religion's business suffered in recent years as recession-scarred shoppers no longer wanted to pay $200 for a pair of jeans.
In March, its CEO Jeff Lubell stepped down and was named chairman emeritus and a creative consultant.
TowerBrook Capital has previously invested in companies including designer shoe marketer Jimmy Choo and athletic apparel retailer Odlo but has since sold those stakes.
It has agreed to pay $32 per share for True Religion, a 9 percent premium to its closing price of $29.44 on Thursday.
"At this critical inflection point in our business, global growth and product development effort, TowerBrook's support and experience will be a true differentiator," Lynn Koplin, the interim CEO and president of True Religion, said in a statement.
True Religion's board unanimously approved the transaction. It still needs approval from the Vernon, Calif., company's stockholders.
Separately, True Religion Apparel Inc. reported a dramatic drop in its first-quarter net income on Friday as the company's results were dragged down by costs of the company's strategic review and the separation agreement with Lubell.
Its shares rose $2.38, or 8 percent, to close at $31.82 Friday, after reaching a 52-week high of $31.85 earlier. Shares were still below the offered price. That suggests investors don't anticipate a richer offer.
For the first quarter ended March 31, True Religion posted net income of $526,000, or 2 cents per share, compared with $10.4 million, or 41 cents per share, in the year ago period.
Excluding the items, the company earned 22 cents per share for the quarter. Analysts expected 34 cents per share, according to a survey by FactSet.
Revenue increased 13.1 percent to $120.8 million. Analysts expected revenue of $113.2 million.
FactSet says True Religion has approximately 25.8 million outstanding shares. The companies put the deal's total value at about $835 million.