American Greetings to sell for $878 million
American Greetings Corp., which has an operation in Osceola, said Monday that the company has agreed to be sold to a group that consists of its top managers as part of a deal worth about $878 million.
The total includes assumption of notes held by the company due in 2021, carrying an interest rate of 7.375 percent, repayment of borrowing under the company’s revolving credit facility and settlement of stock options not held by the Weiss family.
The company, based in Cleveland, is more than 100 years old. It sells cards and other products under brand names that include American Greetings, Carlton Cards, Recycled Paper Greetings, Plus Mark gift-packaging and boxed cards. It also runs an online business, cardstore. com, with a large collection of electronic greeting cards.
According to the company’s news release, it will be sold to a new private entity owned by company Chairman Morry Weiss, director and chief executive officer Zev Weiss; director, president and chief operating officer Jeffrey Weiss; and to related persons and entities.
The agreement provides that American Greetings class A and Class B shareholders, excluding Weiss family members and related entities, will receive $18.35 a share plus one quarterly dividend of 15 cents a share.
The company’s stock has traded between $12.53 and $18.11 in the past year on the New York Stock Exchange. That portion of the transaction will be worth approximately $524 million.
Financing for the transaction is to be through contributions of American Greetings company stock owned by the Weiss family; cash from a $240 million nonvoting preferred stock investment by Koch AG Investment LLC, a subsidiary of Koch Industries Inc.; and $600 million in debt financing, which includes a $400 million term loan and a $200 million in revolving credit.
The lending group includes Bank of America N.A.; Deutsche Bank AG’s New York branch; KeyBank National Association, based in Cleveland; Macquarie Capital USA Inc. of New York; and PNC National Bank of Pittsburgh.
Messages left with media relations personnel at American Greetings seeking additional information were not returned.
American Greetings stock closed Monday at $18.05 a share, up $1.95 or 12.11 percent, on the New York Stock Exchange.