Done Deals: Advent Chooses Merger Over IPO –

Advent International portfolio company Dollar Express Inc. this month completed a merger with publicly traded Dollar Tree Stores Inc., resulting in a small minority stake for Advent in the larger company. Both companies offer a variety of merchandise for $1.00 or less, although Dollar Tree is the nation’s largest chain of this sort.

David Mussafer, a managing director at Advent, said his firm had prepared Dollar Express for an initial public offering, seeing that the company had performed well, and another non-technology company, Krispy Kreme, had recently held a successful IPO. But the merger offered a more attractive valuation, he added.

“Dollar Tree moved rapidly to consummate this deal knowing that we were approaching an IPO,” Mussafer said. “It was an opportunistic opportunity for us.”

Under terms of the merger, Dollar Tree issued or reserved 6 million shares of its common stock, valued at more than $350 million, and assumed $25 million of debt in exchange for all of Dollar Express’s outstanding stock and options.

Advent now holds approximately 2.1 million shares of Dollar Tree valued at approximately $125 million. The Spain family, who are majority owners of Dollar Express, and the company’s management hold the remaining four million shares issued to the Dollar Express shareholders.

Advent invested $35 million in Dollar Express as part of a recapitalization early last year.

Dollar express owns and operates more than 100 stores in the Mid-Atlantic region. The company also operates 25 Spain’s Cards and Gifts stores in the Philadelphia metropolitan area.

Other retail stores within Advent’s portfolio include HMV Music, Waterstone’s Booksellers, and New Look.