American Greetings (AM) inked a deal on Monday to be taken private by chairman Morry Weiss, CEO Zev Weiss and the rest of the founding family in a deal that values the greeting cards maker and party store at $878 million.
Shareholders will receive $18.20 a share in cash as well as a quarterly dividend of 15 cents a share if approved by American Greetings' board of directors. The price represents a premium of 26.9% to the greeting card maker’s closing price on Sept. 25, before the talks were made public.
The transaction is on track to close in July, though it remains subject to customary closing conditions as well as shareholder approval.
The Weiss family said it will finance the acquisition using its already-owned shares in American Greetings as well as cash funded by a $240 million non-voting preferred stock investment committed by Koch Industries. The family will also use debt secured by Bank of America (BAC), Deutsche Bank (DB), KeyBank National Association, Macquarie Capital and PNC Bank (PNC), as well as cash on hand.
The special committee formed by American Greetings' board in September found the offer was “fair and in the best interest” of shareholders. The board unanimously approved of the transaction based on the committee’s recommendation.
American Greetings said the Weiss family sat out of the vote.
"The family believes the transaction is a win for all concerned, including public shareholders,” CEO Zev Weiss said. “The negotiations with the special committee and its advisors were vigorous and arm's length, but we're pleased that we were able to come to an agreement."
Jeffrey Weiss, American Greetings' chief operating officer, said the deal that returns the company to private ownership marks the next chapter of its history. The Weiss family believes American Greetings will be better able to serve the interests of customers, employees and suppliers out of Wall Street’s spotlight.
Shares of American Greetings climbed 12.5% early Monday to $18.11.