Hellman & Friedman to take At Home back into private equity hands in $2.8bn deal

27

US private equity firm Hellman & Friedman has agreed to buy NYSE-listed home décor superstore At Home for $2.8bn including debt.

Stockholders will receive $36 per share in cash under the deal, a premium of about 15% to the Texas-based company’s closing stock price of $31.29 the day prior to the announcement, and 25% to the 30-day volume weighted average share price.

At Home’s share prices had picked up since it hit a bottom of $1.42 in April last year, following a plunge in the market affected by COVID and lower-than-expected earnings. Its highest price was seen in mid-2018 at $40.45.

The retail chain was owned by AEA Investors and Starr Investment Holdings prior to its $130m IPO in 2016. The company also reportedly considered sale options in 2019 as “the poor performance of its stock has turned it into an acquisition target” according to Reuters.

Phil Francis, At Home’s lead independent director and chair of the special committee of the board of directors, said, “After a thorough evaluation and diligent and thoughtful deliberations in consultation with our independent advisors, we are pleased to reach this agreement, which provides stockholders with immediate and substantial value for their investment.

“The special committee and the board considered the current state of the business, its outlook and opportunities, and believe this transaction is the optimal path forward and in the best interest of our stockholders.”

Erik Ragatz, partner at H&F, said, “At Home’s differentiated, low-cost operating model is disruptive to the traditional home channels and provides a strong opportunity for market share gain. This acquisition is consistent with Hellman & Friedman’s strategy to invest in market-leading businesses with substantial runway for growth, and we are looking forward to partnering with At Home’s talented management team to help capture the significant market opportunity in front of the Company.”

The transaction is expected to close in the third quarter, subject to the approval of At Home’s stockholders.

One hurdle for the deal could be the potential claims against the board of directors by law firm Brodsky & Smith. The law office said its investigation concerns whether the board breached its fiduciary duties to shareholders by failing to conduct a fair process, and whether H&F is paying too little for the company.

H&F was reported to be eyeing a $20bn Fund X close earlier in the year with a $125m backing from the Pennsylvania State Employees’ Retirement System.

Copyright © 2021 AltAssets

Get the latest PE News & Research delivered to your inbox every morning