Michaels To Be Acquired, Taken Private in $5B Deal

Michaels exterior feature

Michaels, the Dallas-based retail chain known for supplying do-it-yourself crafters for more than 45 years, is once again being acquired by a private equity firm after a seven-year run as a public company and an impressive valuation run in a very difficult year for the industry.

Apollo Global Management will acquire Michaels and its 1,275-plus U.S. stores for $5 billion, in a deal valuing the retailer at $3.3 billion. Michaels had once again gone public in 2014, eight years after being acquired and taken private by Bain Capital and Blackstone in a $6 billion deal.

The agreement with Apollo gives Michaels a 30-day “go shop” period during which it can consider other offers, under the advisement of UBS Investment Bank. Apollo’s offer is a 47% premium to value of its stock on Feb. 26, when rumors of its being in play first surfaced.

Michaels’s stock in fact rose from $3.70 a share a year ago to $15 a share when the media reports began.

“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,” said James Quella, chairman of the board of directors, in a release.

“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,” said Ashley Buchanan, who had been an ecommerce EVP at Walmart before being named Michaels CEO in January 2020. “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.

Among others, the retailer was noted for quickly standing up same-day delivery and curbside pickup in reaction to the COVID-19 pandemic, doing so in a matter of weeks.