CLEVELAND — American Greetings Corp. is being taken private by its founding family.
The greeting card company said Monday that it has agreed to be acquired by a newly formed entity owned by the Weiss family — including company chairman Morry Weiss; director and chief executive officer Zev Weiss; director, president and chief operating officer Jeffrey Weiss; and others — in a transaction valued at $878 million.
The $18.20 per share price in the buyout deal represents a premium of 26.9% over the trading price for American Greetings Class A shares on Sept. 25, 2012, the date on which the Weiss family initially proposed to acquire the company, and a premium of 13% over the closing trading price on March 28, 2013.
"The family believes the transaction is a win for all concerned, including public shareholders," CEO Zev Weiss said in a statement. "The negotiations with the special Committee and its advisers were vigorous and arm’s length, but we’re pleased that we were able to come to an agreement that properly respects all parties’ interests."
American Greetings said its board created a special committee of independent directors after the Weiss family first expressed its interest in a possible transaction last September. Since then, the committee examined the Weiss family’s proposal and explored alternatives, concluded unanimously that the transaction with the Weiss family was in the best interests of the public shareholders, according to the company. The agreement was approved unanimously by the other independent members of the board.
"We are excited to be able to lead the company into the next chapter of its history," stated COO Jeffrey Weiss. "The transaction returns the company to private ownership in a way that we believe enables the company to continue to serve the interests of its customers, employees, suppliers and the communities in which it operates as it has for over a century."
The transaction will be financed through a combination of the contributions of the American Greetings shares owned by the Weiss family, cash funded by a $240 million nonvoting preferred stock investment committed by Koch AG Investment LLC, a subsidiary of Koch Industries Inc., and $600 million in debt financing, consisting of a $400 million term loan and a $200 million revolving credit facility, and cash on hand.
Completion of the transaction is subject to certain closing conditions, including receipt of the financing, shareholder approval and other customary conditions. American Greetings said in the closing of the deal also is subject to a condition that the holders of a majority of all outstanding shares not held by the Weiss family or by any director or executive officer of the company or any of its subsidiaries approve the agreement.
