Hellman & Friedman confirmed yesterday’s retail rumors with an announcement that the private equity giant has been circling a Plano public company.
Funds affiliated with the New York firm plan to acquire At Home Group in an all-cash deal valued at $2.8 billion, including the assumption of debt, that will take the company private. The Wall Street Journal reported the transaction figure at $2.4 billion.
At Home, which is listed on the New York Stock Exchange, operates more than 200 stores in 40 states that sell home decor.
For At Home, a special committee from its board of directors headed by independent director Phil Francis spearheaded the acquisition process. The special committee tapped Vanya Kasanof and David Friedland of Goldman Sachs & Co. as exclusive financial advisor to the special committee. Fried, Frank, Harris, Shriver & Jacobson served as legal counsel.
Fried Frank corporate partners Warren S. de Wied and Steven J. Steinman, both of New York, co-led the transaction, along with corporate partner Erica Jaffe of New York and corporate associates Alexander G. Feldsott of New York, Scott R. French of Washington, D.C., and P. Ryan Messier of Washington, D.C.
Mary Jane Broussard, chief administrative officer, general counsel and corporate secretary, led the agreement and plan of merger in-house for the retailer.
H&F selected Guggenheim Securities as financial advisor and Simpson Thacher & Bartlett as legal counsel.
The Simpson Thacher team included M&A partners Katie Sudol and Kathy Krause; financing partners Brian Steinhardt and Bill Brentani; executive compensation and benefits partner David Rubinsky; and tax partner Russell Light. All lawyers aside from Brentani of Palo Alto are based in New York.
At Home shareholders are set to receive $36 per share, a premium of about 17% based on May 4’s closing price of $30.67. The May 4 price was used, rather than May 5, due to media speculation that sent At Home shares surging.
The merger is expected to close in the third quarter, pending shareholder and regulatory approvals.
At Home has a 40-day go-shop option within the agreement that allows the retailer to entertain alternative proposals from other third parties with H&F receiving an option to match should a more favorable proposal present itself.
Before the Covid-19 pandemic, At Home had big plans for growth heading into 2020 on its quest to reach 600 stores, but, like many retailers, was derailed when shelter-in-place orders killed foot traffic and left many scrambling to shift strategies long reliant on brick-and-mortar and unfettered supply chains.
For At Home, the backing of H&F will provide additional flexibility and resources as the fast-growing company looks to regain footing – with the added benefit of creating a lucrative and immediate outcome for stockholders.
Wall Street liked the news with shares up more than 20% at market close on May 6, or $1.70 higher than the $36 share purchase price.