Continuing its push into the consumer sector, Leonard Green & Partners has announced a $1.6bn deal to privatise NYSE-listed retailer Jo-Ann Stores.
Leonard Green & Partners is offering a cash buyout of $61 per share, a premium of 34 percent over the stock’s closing price for Wednesday. Even prior to the deal’s announcement, the stock had been a solid performer, steadily climbing off a recent low of $36.40 set in late August.
Jo-Ann Stores, an arts-and-craft retailer, operates more than 750 stores in 48 states. Plans for privatisation have met with support from management, and the company’s board of directors has already urged shareholders to vote in favor of the acquisition. Pending approval, the deal is likely to close by the second quarter of 2011, according to management.
Cash for the acquisition would come via the firm’s Green Equity Investors V and Green Equity Investors Side V limited partnerships. Financing for the transaction is set to come from J.P. Morgan, Bank of America Merrill Lynch and TCW/Crescent Mezzanine, according to regulatory filings.
Leonard Green & Partners manages $9 billion in assets. Its portfolio companies include the Container Store, Neiman Marcus and Petco. Earlier this year, the private equity firm was involved in a $2.9 billion buyout of retailer J.Crew.
The firm also holds a 9.5 percent stake in B.J.’s Wholesale Club and a 14 percent stake in the upscale supermarket chain Whole Foods. Shares of Whole Foods have more than doubled since the start of 2010, trading at $51.35 on 23 December.