We’re still awaiting the proxy statement for Leonard Green & Partners’ proposed $1.6 billion buyout of Jo-Ann Stores Inc. (JAS), which includes the all-important “background of the merger” section. Particularly important in this case, given all of the concerns over Leonard Green’s recent deal for J. Crew (JCG).
In the meantime, a few quick details from the disclosed merger agreement:
- Jo-Ann Stores has a “go-shop” provision that ends on February 14.
- If the retailer accepts a rival offer, it would owe Leonard Green $20 million. If it were to cancel the deal for other reasons, it would owe $44.9 million.
- Were Leonard Green to terminate the deal, for any reason other than a material adverse change (MAC), it would owe Jo-Ann Stores $90 million.
- Leonard Green has committed to provide $449.3 million in equity. The remainder of the purchase price would come from debt financing and cash-on-hand. Debt commitments have been provided by J.P. Morgan, Bank of America Merrill Lynch and TCW/Crescent Mezzanine. As of January 30, Jo-Ann Stores reported $217.1 million in cash-on-hand. That works out to around a 40/60 equity-to-debt ratio.
Expect the full proxy statement later this week…