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Leonard Green & Partners to buy Jo-Ann Stores
24
Dec '10
Jo-Ann Stores Inc announced that it has entered into a definitive agreement to be acquired by an affiliate of Leonard Green & Partners, L.P., for a total price of approximately $1.6 billion, or $61.00 per share in cash. The offer price represents a 34% premium to the closing price of Jo-Ann's shares on December 22, 2010.

The board of directors of Jo-Ann Stores, on the recommendation of a special committee comprised entirely of independent directors (the Special Committee), approved the merger agreement by a unanimous vote of the non-employee directors and recommends that the company's shareholders adopt the agreement.

Darrell Webb, chairman and chief executive officer of Jo-Ann Stores, commented, "We are excited about the prospect of working with Leonard Green & Partners as we further capitalize on opportunities to accelerate the expansion and upgrade of our stores and pursue market share gains. With the help of our talented and dedicated team, we will continue to offer our customers a superior shopping experience for all of their fabric and craft needs."

Jo-Ann Stores' lead director and chairman of the Special Committee, Scott Cowen, stated, "After a thorough assessment, the Special Committee and the board of directors concluded that the proposal put forth by Leonard Green & Partners is the best way to maximize value for shareholders, who will receive a substantial and immediate cash premium for their shares.

“While the company was not actively seeking this transaction, once the offer was received and negotiated, the Special Committee determined that it was in the best interest of the company's shareholders, as well as its employees and other partners. Leonard Green & Partners has significant expertise in the retail space and is dedicated to cultivating and supporting the growth of Jo-Ann's business."

Todd Purdy of Leonard Green & Partners said, "Jo-Ann Stores is a clear leader in the fabric and craft retail industry. We are excited to partner with Jo-Ann Stores' talented management team and look forward to the next phase of the company's growth."

If the acquisition is approved by the holders of a majority of Jo-Ann Stores' shares of common stock, the transaction is expected to close in the first half of calendar 2011. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals, but is not subject to any condition with regard to the financing of the transaction. In accordance with the merger agreement, the board of directors will also be permitted to solicit alternative proposals through February 14, 2011, to ensure the transaction is the best available for its shareholders.

J.P. Morgan, Bank of America Merrill Lynch and TCW/Crescent Mezzanine have provided committed financing for the transaction.

Jo-Ann Stores will file a preliminary proxy statement with the SEC which will contain detailed information about the transaction and the board and special committee process. Once the SEC completes its review of the preliminary proxy statement, Jo-Ann Stores will file the definitive proxy statement with the SEC and distribute it to shareholders.

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