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Blackstone, Bain Capital-backed Michaels Stores valued at $3.45bn through IPO

27 Jun 2014

Michaels stores 2Private equity-backed arts and crafts retailer Michaels Stores has raised about $472m from its IPO after pricing its shares near the bottom of its expected range.

The deal values Michaels at up to $3.45bn after the business sold 27.8 million shares priced at $17 each.

Blackstone and Bain Capital, which bought into the company in 2006, were preparing to make 2.2-times cash returns from the IPO, Reuters previously reported.

The pair paid about $6bn for the business, $1.7bn of which was equity, and owned 93.3 per cent of the company ahead of the public listing.

Highfields Capital Management held the remaining 6.2 per cent.

Bain invested in the company from its $10bn 2006-vintage ninth fund, which was generating a 7.7 IRR, data from the Regents of the University of California showed.

Blackstone backed Michaels via its $21.7bn Fund V, which was generating a 5.67 per cent net IRR at the end of December.

The firms attempted to float the company in a $500m IPO in 2012 but cancelled the plans after CEO John Menzer resigned after suffering a stroke.

Michaels operates 1,200 stores in the US and Canada and owns more than 120 Aaron Brothers stores. It posted sales of about $4.6bn last year.

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