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.
The 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.