Kidpik (NASDAQ:PIK) stock is rising higher on Tuesday after the children’s apparel company announced a merger agreement with Nina Footwear.
Kidpik and Nina Footwear are combining through an all-stock transaction that will see the latter’s investors hold 80% of the combined company’s shares. The deal has the support of both companies’ Boards of Directors and will close in Q3 2024.
When the deal closes, shares of PIK stock will switch to the NINA stock ticker. At that same time, the company will change its name to Nina Holding Corp. The current executive team of Kidpik will continue to lead the combined company.
Ezra Dabah, the chairman and CEO of Kidpik and the CEO of Nina Footwear, said the following about the deal:
“Our transaction is expected to increase Kidpik’s revenue, cashflow and prospects, while also strengthening Kidpik’s balance sheet and significantly increasing stockholder value. I am extremely happy to fulfill the wish of my late father in-law, Mr. Stanley Silverstein, to make Nina a public company on the heels of the 70th anniversary of our family business.”
What to Know About the PIK Stock Deal
Investors will note that there will be no shareholder vote for the deal between Kidpik and Nina Footwear. That’s due to Dabah owning 67% of PIK stock. He and his extended family also own 100% of Nina Footwear.
When the merger between the two companies closes, Dabah and his family will continue to hold a majority of its stock. This will see him, his wife, and his children own 76.8% of NINA stock after the merger.
PIK stock is up 37.9% as of Tuesday morning, with some 1.6 million shares traded. Its daily average trading volume is about 1 million shares.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
