IRVING, Texas and NEW YORK – (BUSINESS THREAD) – The Michaels companies (NASDAQ: MIK) (“Michaels” or “the company”) and funds raised by subsidiaries of Apollo Global Management, Inc. (NYSE: APO) (along with its consolidated subsidiaries “Apollo”) announced today that it has entered into a definitive merger agreement under which investment funds managed by subsidiaries of Apollo have agreed to acquire the company in ‘ a transaction valued by Michaels at an equity value of approximately $ 3.3 billion (for a transaction worth $ 5.0 billion).
Under the terms of the agreement, which was unanimously approved by the Michaels board, Apollo will begin a tender offer to acquire all outstanding shares of Michaels for $ 22.00 per share in cash. The purchase price represents a premium of 47% on the closing rate on February 26, 2021 (the last trading day before press speculations about a possible transaction with Michaels) of $ 15.00 per share and a premium of 78% on the 90-day volume – weighted average price.
“The company’s impressive growth transformation, including our financial and operating performance in the unprecedented environment of the pandemic, has led to an unsolicited offer to buy the company,” said James Quella, chairman of the Michaels board. Following the offer, the board undertook a comprehensive process to test the market and evaluate the value-maximizing path forward for shareholders. The board of directors, informed by the process, believes that Apollo’s offer is a compelling value for our shareholders. It was a privilege to work with Ashley and the management team as they teamed up on the transformation strategy, re-imagining the Michaels omnichannel experience, and driving strong business results in a challenging retail environment. ”
“Our Michaels strategy and the work we have done over the past year has led to phenomenal business results, strengthening our core business and positioning Michaels for long-term sustainable growth,” said Michaels CEO Ashley Buchanan. ‘We are excited to enter into this new chapter with Apollo, who shares our strategic vision for Michaels as an omnichannel retailer providing a one-stop-shop experience for the entire Michaels community. As a private company, we have the financial flexibility to invest, expand and improve in our retail and digital platforms. ”
Andrew S. Jhawar, senior partner and head of the retail and consumer group at Apollo, said: “On behalf of the Apollo Funds, we are delighted with this transaction with Michaels, which is positioning itself as a leading player in the exciting arts and crafts industry. Michaels is the best destination in arts and crafts for the deepest variety with the best customer service.We believe there is an important opportunity to enhance the Michaels brand, shopping experience and omnichannel offering to its customers in North America.Our team of Apollo expects to leverage many of the strategies from the successful investments of our funds in other specialty retailers and groceries with Michaels, and we look forward to working with the management team and the more than 45,000 team members at Michaels to and further enhance digital channels as the most inspiring and engaging experience in the arts and crafts industry. ”
The closing of the transaction is subject to customary closing conditions, including the expiration or termination of certain regulatory periods and the tender for shares representing at least a majority of the company’s outstanding ordinary shares in Apollo, and is expected in Michaels’ first half. close. of the company’s financial year. Upon successful completion of the tender offer, Apollo-managed funds will acquire all remaining shares not offered in the tender offer, through a second-step merger at the same price. The transaction will be funded by a combination of equity provided by Apollo-managed funds, as well as a dedicated debt financing package provided by Credit Suisse, Barclays, Wells Fargo, RBC Capital Markets, Deutsche Bank, Mizuho and Bank of America be delivered.
The merger agreement provides for a ‘go-shop’ period, during which Michaels – with the help of UBS Investment Bank, its exclusive financial adviser – will actively undertake, evaluate and possibly negotiate with and provide access to the necessary prudence to parties who: submit alternative proposals. The store period is 25 calendar days, starting today. Michaels has the right to terminate the merger agreement to make a better proposal subject to the terms and procedures specified in the merger agreement, which Michaels will submit with a current report on Form 8-K. There can be no assurance that this process will result in a better proposal. Michaels does not intend to disclose the developments regarding this process unless and until his board has made a decision regarding any potential proposal.
After the transaction is completed, Michaels becomes a private company and shares in MIK ordinary shares will no longer be listed on any public market.
UBS Investment Bank acts as exclusive financial advisor to Michaels and Ropes & Gray acts as legal advisor to Michaels. Simpson Thatcher & Bartlett LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP act as legal advisers to Apollo and Credit Suisse acts as financial advisor to Apollo.
Results update for the fourth quarter and the financial year 2020
In light of the announced transaction, the company will issue a press release with its financial results for the fourth quarter and fiscal year 2020, before the market opens on Thursday, March 4, 2021, but the revenue conference call on Thursday, March was planned. 4, 2021, at 08:00 CT will no longer take place.
About the Michaels Companies, Inc.:
The Michaels Companies, Inc. is North America’s largest specialty supplier of arts, crafts, framing, flowers, wall decoration and seasonal merchandise for Michaels and home decorators. The company operates more than 1,275 Michaels stores in 49 states and Canada. In addition, the company serves customers through digital platforms, including Michaels.com and Canada.michaels.com. The Michaels Companies, Inc., is also the owner of Artistree, a manufacturer of high quality custom merchandise and specialization. Visit www.michaels.com or download the Michaels app for a list of stores or to shop online.
About Apollo:
Apollo is a leading global investment manager with offices in New York, Los Angeles, San Diego, Houston, Bethesda, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong, Shanghai and Tokyo. As of December 31, 2020, Apollo has approximately $ 455 billion in assets under credit, private equity and fixed assets. Visit www.apollo.com for more information on Apollo.
Important information
The tender offer for the outstanding shares of Michaels ordinary shares has not yet started. This notice is for informational purposes only and is not an offer to buy or a request for an offer to sell shares in Michaels ordinary shares. The request and offer to buy shares of Michaels ordinary shares will only be made on the basis of the tender material that Apollo intends to submit to the US Securities and Exchange Commission (the ‘SEC’). At the time the tender offer starts, Apollo will submit a tender offer on the ANNEXURE to the SEC, and Michaels will submit a request / recommendation statement on Schedule 14D-9 regarding the tender offer. MICHAELS SHAREHOLDERS ARE REQUIRED TO READ THE SCHEDULE (INCLUDING AN OFFER OF PURCHASE, A RELATED LETTER OF TRANSFER AND OTHER OFFERING DOCUMENTS) AND THE ANNEXURE 14D-9, EVERY TIME OF ANYTHING WAS LEARNED WHEN THEY WILL BE AVAILABLE BEFORE THEY DECIDE IN RESPECT OF THE TENDER OFFER BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THEM. Both the sale offer statement and the invitation / recommendation statement will be posted free of charge to Michaels’ shareholders. Investors and shareholders can obtain free copies of Schedule TO and Schedule 14D-9, as each may change or supplement from time to time, and other documents submitted by the parties (if available) on the SEC’s website at www.sec . by contacting Michaels ‘Investor Relations by telephone at 972-409-1393, by email at [email protected] or on Michaels’ website at www.michaels.com.
Forward-looking statements
This news release contains forward-looking statements that reflect the current views and estimates of the management regarding the ability of the parties to complete the proposed transaction and the expected time for completion of the proposed transaction. The words “anticipate,” “assume,” “believe,” “proceed,” “could,” “estimate,” “expect,” “predict,” “future,” “guidance,” “imply,” “of plan, “” power, “” prospects, “” plan, “” potential, “” predict, “” project, “and similar terms and phrases are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words . The company can not assure investors that future developments affecting the company will be as he expected. Actual results may differ materially from these expectations due to uncertainties regarding the timing and expected financing of the tender offer and the merger; uncertainty about how many of Michaels’ shareholders will offer their shares in the tender offer; the possibility that any or all of the different conditions for the completion of the tender offer, including the failure to obtain the required regulatory approvals from any applicable government entities, may not be met in time or waived; the possibility of business interruptions due to transaction-related uncertainty; the occurrence of any event, change or other circumstance that may give rise to the termination of the merger agreement; and other risks and uncertainties, including those identified under the heading “Risk Factors” in the Company’s most recent annual report on Form 10-K and quarterly reports on Form 10-Q, each submitted to the Securities and Exchange Commission (SEC) “submitted”) and available at www.sec.gov, and other documents that the Company may make to the SEC in the future. If one or more of these risks or uncertainties materializes, or as one of the Company’s assumptions turns out to be incorrect, the actual results of the company may differ materially from those projected in these forward-looking statements.
Any forward-looking statement made by the Company in this news release only speaks on the date hereof. Factors or events that may cause the actual results of the company to differ may arise from time to time, and it is not possible for the company to predict them all. The Company does not specifically undertake or reject any obligation to update or revise any forward-looking statement in public, whether as a result of new information, future developments or otherwise, except as required by applicable security laws.