Michaels To Be Taken Private in $5 Billion Acquisition

Irving, Texas, and New York City — The Michaels Companies and private equity firm Apollo Global Management, Inc. have entered into a definitive merger agreement whereby investment funds managed by affiliates of Apollo have agreed to acquire Michaels. Upon completion of the $5 billion transaction, Michaels will become a privately held company and shares of MIK 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 $22.00 per share in cash.

“The company’s impressive growth transformation, including our financial and operational performance in the unprecedented environment of the pandemic, led to an unsolicited offer to buy the company,” says James Quella, chairman of the Michaels board of directors. “Following that offer, the board undertook a comprehensive process to test the market and to evaluate the value maximizing path forward for shareholders. The board of directors, informed by that process, firmly believes Apollo’s offer represents a compelling value to our shareholders.

“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,” says Ashley Buchanan, chief executive officer of Michaels. “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.”

The closing of the transaction is expected to close in Michaels’ first half of the company’s fiscal year. 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. The transaction will be financed through a combination of equity provided by Apollo managed funds as well as a committed debt financing package to be provided by Credit Suisse, Barclays, Wells Fargo, RBC Capital Markets, Deutsche Bank, Mizuho, and Bank of America.

UBS Investment Bank is acting as exclusive financial advisor to Michaels and Ropes & Gray is acting as legal advisor to Michaels. Simpson Thatcher & Bartlett LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP, are acting as legal advisors to Apollo and Credit Suisse acted as Apollo’s financial advisor.

The Michaels Companies, Inc. is North America’s largest specialty provider of arts, crafts, framing, floral, wall décor and seasonal merchandise for Michaels and do-it-yourself home decorators. The company operates more than 1,275 Michaels stores in 49 states and Canada. The Michaels Companies, Inc., also owns Artistree, a manufacturer of high-quality custom and specialty framing merchandise. For more information, visit www.michaels.com.

Apollo is a leading global investment manager. For more information, visit www.apollo.com.



SOURCE: The Michaels Companies, Inc. / Apollo Global Management

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