Michael and a private equity firm, named Apollo Global Management, have entered into a merger agreement where Michaels will be acquired for $5 billion.
All of the Michaels' board members approved the merger with the private equity firm, which is scheduled to close in the first half of the fiscal year. The acquisition will be financed both with equity from Apollo Global Management and debt provided by Credit Suisse, Barclays, RBC Capital Markets, Deutsche Bank Wells Fargo and more.
"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," said Ashley Buchanan the CEO of Michaels.
Michaels will now have a 25-day period to evaluate other potential offers and will have the right to end its agreement with Apollo Global Management if it is able to secure a better offer.
Retail Chain Acquisitions
Michaels Will Be Acquired by a Private Equity Frim in a $5 Billion Deal
Trend Themes
1. Omnichannel Retailing - Michaels' acquisition by a private equity firm highlights the increasing importance of omnichannel retailing in the industry, suggesting that companies that can offer a comprehensive shopping experience may have a competitive advantage.
2. Private Equity Acquisitions - The acquisition of Michaels by Apollo Global Management is part of a larger trend of private equity firms acquiring retail chains, indicating that there may be opportunities for investment in this space.
3. Digital Transformation - Michaels' focus on enhancing its digital platforms following the acquisition suggests that companies that prioritize digital transformation may be better positioned to succeed in the current retail environment.
Industry Implications
1. Retail Industry - The acquisition of Michaels by Apollo Global Management indicates that the retail industry is undergoing a transformation, with traditional brick-and-mortar retailers facing pressure to adapt to changing consumer preferences and competition from e-commerce companies.
2. Private Equity Industry - The trend of private equity firms acquiring retail chains suggests that there may be opportunities for investment and growth in this industry, particularly in companies that are struggling to adapt to the changing retail landscape.
3. Digital Marketing Industry - Michaels' focus on enhancing its digital platforms highlights the growing importance of digital marketing and e-commerce in the retail industry, suggesting that companies that specialize in these areas may see increased demand for their services and expertise.