Michaels IPO Details Announced

Michaels Stores is finally moving ahead with its long-planned IPO, after the company filed paperwork this week with the U.S. Securities & Exchange Commission registering details of their intended stock offering.

The company has been privately held since being purchased by Bain Capital and the Blackstone Group in 2006. The two private equity firms have been working on a Michaels IPO since 2012, but it has been delayed multiple times by market conditions and the stroke of then-CEO John Menzer, which lead to a lengthy search for a replacement.

Michaels storeThe company, which will legally be known as The Michaels Company, Inc. after the offering, is planning to issue nearly 28 million shares of common stock at an estimated price of $18 a share. Despite the IPO, Bain Capital and the Blackstone Group will continue to control the company. Filings indicate that together, the two (along with a few other current shareholders) will control 80% of the company’s stock post-IPO. This will give them control of the new company’s board of directors, and effectively the company itself.

The IPO is expected to raise between $400-$600 million dollars in capital for Michaels Stores to execute growth and expansion plans. If the stock’s initial offering is set at $18/share, in the middle of the expected range, it will raise approximately $466 million for the company. The stock’s prospectus indicates that the company does not plan to pay cash dividends in the near future, instead using any money to service the company’s considerable debt.

Michaels company stock will be sold on the NASDAQ exchange under symbol MIK. No date has been announced for the IPO sale but the SEC filings indicate the company wishes to make it “as soon as is practicable” after the registration is made effective by the SEC. A sale is widely expected to take place next week.

6 Responses to Michaels IPO Details Announced

  1. Debby Lewis June 21, 2014 at 1:07 pm #

    Interesting. Do you think in all the new inflow of funds they will expand or redefine their business model?

    • Nancy Nally June 21, 2014 at 1:30 pm #

      They have announced (and been executing) ambitious plans to open new stores, and of course there is the new online store. They talk about some of these plans in the IPO prospectus.

  2. gabmcann June 21, 2014 at 9:32 pm #

    What will happen if they don’t raise the funds they need?

    • Nancy Nally June 21, 2014 at 10:05 pm #

      This isn’t a “they need to raise the funds to survive” situation. They are doing the IPO because they are successful and looking to get investment to expand more. They’ll have no problems selling the shares in the target range.

  3. Amanda June 22, 2014 at 8:53 pm #

    What rock have I been living under…LOL…glad they finally have an online store.

  4. gabmcann June 27, 2014 at 3:51 am #

    Thanks for the explanation Nancy

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