The Michaels Companies (Michaels) and funds managed by affiliates of Apollo Global Management Inc. (Apollo) have entered into a definitive merger agreement through which investment funds managed by affiliates of Apollo will acquire the company. The transaction values Michaels at an equity value of approximately $3.3 billion (for a transaction valued at $5 billion).
Following the transaction, Michaels will become a privately held company and shares of its common stock will no longer be listed on any public market.
Under the terms of the agreement, which has been unanimously approved by the Michaels Board of Directors, Apollo will commence a tender offer to acquire all outstanding shares of Michaels for $22 per share in cash. The purchase price represents a 47% premium to the closing stock price on Feb. 26, 2021 (the last trading day prior to press speculation about a potential transaction involving Michaels) of $15 per share, and a 78% premium to the 90-day volume-weighted average price.
“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 in a statement. “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. As a private company, we will have financial flexibility to invest in, expand and improve our retail and digital platforms.”
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The transaction is subject to customary closing conditions. Following the successful completion of the tender offer, Apollo managed funds will acquire all remaining shares not tendered in the tender offer through a second-step merger at the same price.
