The Michaels Cos., which operates the chain of more than 1,275 Michaels stores in the U.S. and Canada with 45,000 employees, is being acquired by investment funds managed by Apollo Global Management, Inc., in a deal valued at approximately $5 billion.
Michaels bills itself as North America’s largest specialty provider of arts, crafts, framing, floral, wall décor and related merchandise. The chain has several outlets in the Hudson Valley and Connecticut including in Hartsdale, Port Chester, Yonkers, Pelham Manor, Brewster, Mohegan Lake, Central Valley, Newburgh, Poughkeepsie, Middletown, Stamford, Westport, Bridgeport, Wilton and Milford.
Apollo is making a tender offer to buy all outstanding shares of Michaels for $22 a share in cash, representing a 47% premium over the stock”™s closing price on Feb. 26 of this year. Apollo will be taking the public company private.
Andrew S. Jhawar, senior partner and head of the retail and consumer group at Apollo, said, “We believe there is a significant opportunity to enhance the Michaels brand, store experience and omnichannel offering to its customers across North America. Our team at Apollo expects to leverage many of the strategies from our funds”™ successful investments in other specialty retailers and grocers with Michaels.”
“As a private company, we will have financial flexibility to invest in, expand, and improve our retail and digital platforms,” said Ashley Buchanan, the CEO of Michaels. “We are excited to enter into this new chapter together with Apollo, who shares our strategic vision for Michaels as an omnichannel retailer that offers a one-stop-shop experience for the entire Michaels community.”
Following the successful completion of the tender offer, Apollo managed funds will acquire all remaining shares not tendered through a second-step merger at the same price. The transaction will be financed through a combination of equity provided by Apollo managed funds as well as debt financing from Credit Suisse, Barclays, Wells Fargo, RBC Capital Markets, Deutsche Bank, Mizuho, and Bank of America.
The merger agreement provides for a “go-shop” period, during which Michaels, with the assistance of its exclusive financial adviser, UBS Investment Bank, can solicit, evaluate and potentially enter into negotiations regarding alternative proposals. The go-shop period runs until March 28 and gives Michaels rights to terminate the merger agreement to enter into a superior proposal subject to certain conditions and procedures.
Apollo had assets under management of approximately $455 billion as of Dec. 31, 2020, in credit, private equity and real assets funds.
