99 Cents Only Stores gets $1.34 billion buyout offer
12 Mar 2011
US retail discount chain operator, 99 Cents Only Stores, yesterday said it had received an offer for a cash buyout of $1.34 billion from members of the Schiffer-Gold founding family and private-equity firm Leonard Green & Partners.
Founded in 1982, 99 Cents Only Stores operates 283 retail stores across California, Texas, Arizona and Nevada.
Over half of the company's sales come from food and beverages, including produce, dairy, deli and frozen foods. It also includes organic and gourmet foods.
Stores open at least a year generated average net sales per estimated sellable square foot of $289 and average net sales per store of $4.8 million, which the company believes are the highest in the dollar store industry. For fiscal 2010, 99 Cents Only Stores posted sales of $1.36 billion.
The Schiffer-Gold family, holding about 33 per cent stake in the company, has teamed up with Leonard Green to make a $19.09 per share offer, representing a premium of 14.4 per cent to the company's closing price on 10 March 2011.
David Gold is company founder and chairman. His son-in-law Eric Schiffer is CEO.
In a letter sent to the company, the Schiffer-Gold family said that as part of the proposed acquisition, it would contribute a "substantial portion" of its existing stock ownership.
Los Angeles-based Leonard Green has recently been active in retail acquisitions. It had teamed up with TPG Capital and the management to acquire multi-brand specialty retailer J Crew for $3 billion in November 2010, and has proposed to buy fabric and craft store chain Jo-Ann for $1.6 billion.
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