The All Ordinaries (ASX: XAO), or ASX All Ords, stock Myer Holdings Ltd (ASX: MYR) has had a troubled history on the ASX. But, since the onset of COVID-19, the department store retail business has slowly regained some ground.

Over the last few years, it has focused on increasing profitability, which has helped rebuild some investor confidence in the business.

But, one move by the department store business has excited the market, including fund manager Wilson Asset Management (WAM).

Myer is one of the biggest 20 positions in the WAM Research Limited (ASX: WAX) portfolio, with the listed investment company (LIC) looking for "the most compelling undervalued growth opportunities in the Australian market".

A recent announcement is one of the main reasons WAM is bullish.

A big acquisition for the ASX All Ords stock

WAM noted that in October, Myer announced a $864 million plan to buy the apparel business of Premier Investments Limited (ASX: PMV). That deal will add 719 stores to Myer's 56 department stores.

With the ASX All Ords stock's acquisition comes a number of brands including Just Jeans, Jay Jays, Portmans, Dotti and Jacqui E, with those businesses separately catering for younger shoppers and older women.

The fund manager believes that Myer's new executive chair, Olivia Wirth's growth strategy is a "great outcome" for both Myer and Premier Investments shareholders.

For Myer and the apparel brands, WAM has estimated conservative synergies of $30 million and a growth strategy led by its customer loyalty program, Myer One. The fund manager noted that this merger was being conducted in a "very tough environment" for retail.

For Premier Investments, the analyst team believe the market can now "finally see the quality of the Smiggle and Peter Alexander businesses and the offshore growth strategy, which can drive a higher valuation over time".

What did Myer say about the deal?

Myer believes the acquisition will significantly enhance the scale and capabilities of the business to drive growth, operating leverage and greater capacity to invest in growth across the combined Myer business.

The ASX All Ords stock also said the combined business would be well-positioned to take advantage of capabilities in product development, design, sourcing and distribution to "realise the full potential of Myer's exclusive brands and private label portfolio and deliver improved margins for the group."

Myer calculated that before including the synergies benefits, in FY24, a combined business would have made $4 billion in sales, $1.65 billion in operating gross profit, and $250 million in operating profit (EBIT) from 783 stores.

The meeting for shareholders of the ASX All Ords stock to vote on approving this deal is expected to be held in late January. The transaction's completion is scheduled for early 2025.