Target: Jo-Ann Stores
Price: $1.6 billion
Sponsor: Leonard Green & Partners
Target Financial Advisers: Centerview Partners and J.P. Morgan
Target Legal Counsel: Sullivan & Cromwell LLP and Thompson Hine LLP
Fabric and crafts retailer Jo-Ann Stores Inc. agreed last month to be bought by an affiliate of private-equity firm
Leonard Green’s offer at $61 per share is at a premium of 34 percent to Jo-Ann’s close on Wednesday, Dec. 22. In November, Leonard Green, along with the
Going private would help Jo-Ann speed up its expansion and store upgradE plans, leading to market share gains, chief executive Darrell Webb said in a statement. Jo-Ann, which competes with A.C. Moore Arts & Crafts Inc. and privately held Michaels Stores, was not actively seeking a transaction, the company’s lead director Scott Cowen said in a statement.
The Hudson, Ohio-based Jo-Ann has been topping Wall Street estimates in recent quarters. Its shares had gained about 34 percent through Dec. 22, since falling to a low of $34 in December 2009.
The retail sector has seen a slew of private equity deals recently as buyout firms have been under pressure to spend money before their investment periods end. Childrens apparel retailer Gymboree Corp was taken private recently, and there have been reports of possible private equity interest in Build-A-Bear and Aeropostale Inc.
Jo-Ann sells merchandise used in sewing, crafting and home decorating projects. The deal is expected to close in the first half of 2011. The company can solicit alternative proposals through February 14.
Centerview Partners and J.P. Morgan are serving as financial advisers and Sullivan & Cromwell LLP and Thompson Hine LLP as legal advisers to Jo-Ann Stores.
Shares of Jo-Ann were up 33 percent at $60.5 in late December trading on the New York Stock Exchange.
Reporting by NR Sethuraman of Reuters in Bangalore; editing by Don Sebastian, Prem Udayabhanu.