Jo-Ann Stores set to be acquired by affiliate of Leonard Green & Partners
December 23, 2010,
Hudson, Ohio - Longtime fabrics and crafts retailer Jo-Ann Stores Inc. is set to be acquired by an affiliate of the private equity firm Leonard Green & Partners L.P.
The retailer has entered into a definitive agreement for its purchase for a total price of about $1.6 billion, or $61.00 per share in cash. The offer price represents a 34% premium to the closing price of Jo-Ann's shares on Dec. 22.
On the recommendation of a special committee comprised entirely of independent directors, Jo-Ann Stores' board of directors approved the merger agreement by a unanimous vote of the non-employee directors and recommends that the company's shareholders adopt the agreement.
Todd Purdy of Leonard Green & Partners, described Jo-Ann Stores as a "clear leader" among fabric and crafts retailers.
"We are excited to partner with Jo-Ann Stores' talented management team and look forward to the next phase of the company's growth," he said.
If the acquisition is approved by holders of a majority of Jo-Ann Stores' shares of common stock, the transaction is expected to close in the first half of calendar 2011. It is subject to customary closing conditions, including the receipt of regulatory approvals, but is not subject to any condition with regard to the financing of the transaction. In accordance with the merger agreement, the board of directors will also be permitted to solicit alternative proposals through February 14, 2011, to ensure the transaction is the best available for its shareholders.
J.P. Morgan, Bank of America Merrill Lynch and TCW/Crescent Mezzanine have provided committed financing for the transaction.
Jo-Ann Stores' special committee lead director and chairman, Scott Cowen, said that "after a thorough assessment," his committee and the retailer's board concluded that the proposal put forth by Leonard Green & Partners "is the best way to maximize value for shareholders, who will receive a substantial and immediate cash premium for their shares. While the company was not actively seeking this transaction, once the offer was received and negotiated, the special committee determined that it was in the best interest of the company's shareholders, as well as its employees and other partners."
Cowen also noted that Leonard Green & Partners has "significant expertise in the retail space" and is "dedicated to cultivating and supporting the growth of Jo-Ann's business."
With more than $9 billion in equity capital under management, Los Angeles-based Leonard Green & Partners invests in companies across a range of industries, including retail with Whole Foods Market, PETCO Animal Supplies, Leslie's Poolmart, Sports Authority, The Container Store, Tourneau, David's Bridal, Neiman Marcus Group, Jetro Cash & Carry and Tire Rack.
Jo-Ann Stores will file a preliminary proxy statement with the SEC which will contain detailed information about the transaction and the board and special committee process. Once the SEC completes its review of the preliminary proxy statement, Jo-Ann Stores will file the definitive proxy statement with the SEC and distribute it to shareholders.
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