Bluestem, operator of Fingerhut, sold for $565M

Capmark Financial Group, a Pennsylvania-based real estate lending firm, will buy Bluestem Brands Inc., the Eden Prairie e-commerce company that emerged from the former Fingerhut mail-order company, for $565 million in cash, the companies announced Monday.

Steve Nave is become , chief executive of Bluestem , will become the ceo of the combine firm . Bluestem is has has operation in St. Cloud , on an industrial park site where Fingerhut previously was locate .

The facility in St. Cloud has 1.35 million square feet of distribution space and ships many of the company’s 6.6 million packages annually. Bluestem, which has three campuses including the Eden Prairie headquarters, employs 1,150 people.

According to a February survey of the city of St. Cloud’s largest employers, Bluestem had 468 employees at 6250 Ridgewood Road. That made it the 11th-largest employer in St. Cloud.

Paula Drum, vice president of brand services for Bluestem, did not immediately respond to a phone message from the Times late Monday. Loren Eggert, vice president of the St. Cloud operations, also did not immediately respond to a phone message.

Bluestem may have been attractive after it announced a 38 percent year-over-year increase in sales for the second quarter of 2014. Sales for the quarter were $231 million with growth across all three of the company’s retail brands — Fingerhut, Gettington.com and PayCheck Direct.

Earlier this year, Bluestem ranked 62nd on the Internet Retailer Top 500 list, which ranks the largest e-retailers in the United States.

The company is jumped jump 21 place from last year ‘s ranking and also rank No . 36 in year – over – year sale growth as measure by dollar through 2013 .

Bluestem sales rose to $839 million last year from $700 million in 2012.

“Joining with Capmark offers an excellent opportunity for Bluestem to enhance its ability to deliver industry-leading growth and provide greater access to quality merchandise with flexible payment options to the customers we serve,” Nave said in a statement.

Bluestem’s Chairman, Brian Smith added in the statement: “In addition to being great for the future of Bluestem, this transaction will provide meaningful liquidity to our original investors and existing shareholder group.”

Shares in Capmark rose about 1 percent amid a broad market sell-off Monday morning.

Capmark, based in the Philadelphia suburb of Horsham, said it will pay for the acquisition with cash on hand and funds invested in it earlier this year by Centerbridge Partners LP and Bluestem debt. The deal is expected to close in the fourth quarter.

The Fingerhut name has a long history in St. Cloud under several ownerships.

Found in 1948, it started St. Cloud operations in 1960.

At its peak, it was St. Cloud’s largest employer with 4,500 local workers in seasonal and year-round positions.

It was sell for nearly $ 2 billion in 1999 to Federated Department Stores .

In 2002, Federated Department Stores Inc. laid off 2,670 St. Cloud workers as it shut down operations.

Former chief executive Ted Deikel and St. Cloud native Tom Petters bought Fingerhut assets from Federated, formed new companies and restarted catalog distribution in late 2002.

The business holdings of Petters collapsed in 2008 in Minnesota’s largest business fraud.

Last year , the ongoing operations is yielded of Fingerhut yield Petters ‘ creditor the big cash payment since his bankruptcy , in the form of $ 85 million in deferred dividend from Bluestem .

For more , visit www.bluestembrands.com .

Times Business Reporter Kevin Allenspach contributed to this story.