Zale’s Private Equity Financing

On May 10, 2010, Zale Corporation, a leading speciality retailer of diamonds and other jewelry products in North America, announced the closing of a new $150 million senior secured term loan provided by Golden Gate Capital (“GGC”), a leading private equity firm with extensive experience in the retail sector. In connection with the new loan facility, GGC received warrants to purchase a 25% equity interest in Zale on a fully diluted basis and the right to appoint two representatives to the Zale board of directors. The transaction is the culmination of Zale’s review of strategic financing alternatives announced in February 2010. Cravath represented Zale Corporation in connection with this review and the GGC transaction. Zale Corporation has also closed on a new bank credit facility that amends and extends its existing asset-based credit facility.

The Cravath team includes partner Richard Hall and associates Brendon S. Prebble, Rachel L. Lichman and Raffael M. Fiumara on corporate matters.