American Greetings, the greeting card and self-described “social expression†products company, said on Monday that it had agreed to be taken private by its founding family in a deal it valued at $878 million.
The Weiss family includes the company’s chairman, Morry Weiss, as well as his sons, Zev, the chief executive, and Jeffrey, the president and chief operating officer. If the deal to go private is approved by the board, they will pay non-family shareholders $18.20 a share in cash plus a dividend of 15 cents a share. The buyout group is also assuming the company’s 7.37 percent notes due in 2021.
The $18.20 price represents a premium of 13 percent from the price of the company’s class A shares on Thursday and a premium of 27 percent from their price on Sept. 25, when the Weiss family first proposed acquiring the company.
After that overture, the board of American Greetings formed a special committee to examine the proposal and to consider alternatives. The Weiss family did not participate in that review process. The committee “concluded unanimously that the transaction with the Weiss family was fair and in the best interests of the company’s public shareholders (other than the Weiss Family shareholders),†the company said in a statement on Monday.
American Greetings, which is based in Cleveland, has been a public company since 1969. The business traces its roots to Jacob Saperstein, who soon after arriving in the United States from Poland in 1905, began buying post cards from German manufacturers and selling them to local merchants in Cleveland. In the 1940s, Saperstein’s sons changed the family name to Stone. Morry Weiss is the son-in-law of Irving Stone, a former chairman.
The Weiss family will roll their shares into the transaction. In addition, the buyout is being financed by a $240 million non-voting preferred stock investment committed by Koch AG Investment, a subsidiary of the conglomerate Koch Industries. The buyout group also has $600 million in committed debt financing, consisting of a $400 million term loan and a $200 million revolving credit facility, as well as cash on hand.
Peter J. Solomon Company and the law firm Sullivan & Cromwell advised the special committee of the board. The law firm Baker & Hostetler advised American Greetings.
KeyBanc Capital Markets and the law firm Jones Day advised the Weiss family. Latham & Watkins is providing legal counsel to Koch AG Investment.
