Michaels Acquired By Apollo Global Management For $3.3B

The Michaels Companies Inc MIK has been acquired by Apollo Global Management Inc. APO for $3.3 billion.

What Happened: Michaels, which has more than 1,200 stores and a 44,000-person workforce, has seen its fortune uptick during the COVID-19 pandemic, with many people turning to arts and crafts as a means of passing time during the stay-at-home edicts.

Michaels’ shares have surged by nearly 300% over the past year, resulting in a market capitalization of approximately $2.3 billion. In its third-quarter earnings announced in December, the company recorded $1.4 billion in net sales, a 15.1% year-over-year increase.

Reports of a potential acquisition percolated earlier this week.

What Happens Next: Under the terms of the newly announced acquisition Apollo will commence a tender offer to acquire all outstanding shares of Michaels for $22 per share in cash.

Michaels, which will be taken private after seven years as a publicly-traded company, will announce its fourth quarter and fiscal year 2020 earnings before the market opens March 4. However, the earnings conference call scheduled for March 4 has been canceled.

"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 Michaels CEO Ashley Buchanan.

"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," she continued. "As a private company, we will have financial flexibility to invest in, expand, and improve our retail and digital platforms."

MIK Price Action: As of Wednesday morning, Michaels shares were trading at $22.13, up 22.89%.

(Photo by Anthony92931 via Wikimedia)