Apollo will acquire all outstanding shares of Michaels stock at $22 per share. The purchase price is a 47 percent increase over the closing price of $15 per share on Feb. 26 and a 78 percent premium to the 90-day volume-weighted average price.
James Quella, chair of the Michaels board of directors, said that despite the pandemic, the company experienced an “impressive growth transformation.” He added that the offer by Apollo to buy the company was “unsolicited.”
The acquisition takes the Nasdaq-traded company private. The merger agreement includes a 25-day “go-shop” period, where Michaels will be able to consider other options. UBS Investment Bank is serving as the company’s financial advisor and will evaluate and negotiate other offers.
“Our Michaels strategy and the work that we have done in the past year have led to phenomenal business results, strengthened our core business and positioned Michaels for long-term sustainable growth,” said Ashley Buchanan, CEO of Michaels.
“As a private company, we will have financial flexibility to invest in, expand and improve our retail and digital platforms,” Buchanan added.
Andrew S. Jhawar, senior partner and head of the Retail and Consumer Group at Apollo, said there is a lot of room to elevate the Michaels brand as the “go-to-destination in arts and crafts.”
“Our team at Apollo expects to leverage many of the strategies from our funds’ successful investments in other specialty retailers and grocers with Michaels,” he added.
Buchanan, a former Walmart executive, became CEO of Michaels in January of last year, replacing Mark Cosby, who was named the company’s interim CEO in February 2019. He was appointed full-time CEO in October 2019.
Michaels grew eCommerce more than 350 percent year on year, the company reported in the second-quarter ending in August. The arts and crafts retailer said it reopened all retail locations in July.