Michaels, the US crafting and hobby retail chain, has agreed to a sale to Apollo Global Management at an equity value of about US$3.3 billion, reported Blomberg.
Apollo will pay US$22 a share to Michaels shareholders, representing a 22% premium from Tuesday’s close. The Michaels board has unanimously approved the deal, according to a statement Wednesday, March 3.
Although the offer was unsolicited, Michaels Chairman James Quella said it made sense. The company’s management “firmly believes Apollo’s offer represents a compelling value to our shareholders.”
Apollo’s interest in Michaels comes on the heels of the company’s best annual stock performance since its latest initial public offering in 2014. Shares rose 61% last year, fueled by all the crafting items and home decor purchased by families stuck at home during the pandemic. That marked a major turnaround from prior years, when the growth of Amazon and flagging sales had forced the chain to shutter dozens of locations.
“While demand may drop back a bit in 2021, the crafting market will remain elevated compared to where it was pre-pandemic,” Neil Saunders, managing director of GlobalData, wrote in an emailed statement. “Michaels’ new owners, Apollo, will be able to take advantage of this as they look to grow the company’s top line.”
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