Michaels Draws Buyout Interest From Private Equity

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Apollo Global Management and at least one other private equity firm have expressed interest in acquiring Michaels, the hobby retailer, according to two people familiar with the situation.

A buyout would return the retailer to private hands after seven years as a public company. The values of the bids weren’t clear.

Bolstered by a pandemic boom in home crafts, shares of the retailer, which has more than 1,200 stores and some 44,000 employees, have risen by nearly 300 percent over the past year, giving it a market capitalization of around $2.3 billion.

The people, who requested anonymity because the outreach is still confidential, said it is possible that Michaels would opt against a deal. The company is due to report its latest earnings on Thursday.

Michaels did not immediately respond to a request for comment.

Michaels, like others in the arts and crafts industry, has seen its business boosted by the pandemic as people turn to hobbies during stay-at-home orders. Jo-Ann Fabrics and Crafts, once struggling, filed for to go public last month after a rise in sales during the pandemic. Shares of Etsy have quadrupled over the past 12 months.

Michaels is also one of several retailers that has accelerated its online investments as the pandemic forced companies to serve shoppers wary of visiting stores in person. It has launched both curbside delivery and same-day delivery over the past year.

The private equity firms Bain Capital and Blackstone acquired Michaels in 2006, taking it private in a deal worth more than $6 billion. The company made its way back into the public markets in 2014, at a market value of about $3.5 billion. Bain is still a large shareholder.

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