A.C. Moore Arts & Crafts, Inc. (NASDAQ: ACMR) (“A.C. Moore”
or the “Company”) today announced that the Company has signed a
definitive agreement to be acquired by an affiliate of Sbar’s, Inc.
(“Sbar’s”), one of the largest arts and crafts distributors in the
United States, for $1.60 per common share in cash.
The Agreement and Plan of Merger was unanimously approved by
A.C. Moore’s Board of Directors, upon the unanimous recommendation
of a Special Committee of the Board, which was comprised solely of
non-employee independent directors. The Special Committee was
formed in January 2011 to oversee a review of strategic
alternatives that was initiated following the Company’s receipt of
unsolicited expressions of interest.
“Today’s announcement provides an outstanding opportunity for
our key stakeholders and was the result of the Special Committee’s
comprehensive review of a range of possible strategic alternatives
to enhance shareholder value and reposition the Company for
stability and improved operations,” said Michael J. Joyce, Chairman
of A.C. Moore’s Board of Directors and a member of the Special
Committee.
Mr. Joyce continued, “After conducting a thorough review of
alternatives, the Special Committee and the Board of Directors
unanimously concluded that this transaction with Sbar’s is in the
best interest of our key stakeholders. For shareholders, the
agreement provides full liquidity at a price that represents a 68
percent premium to A.C. Moore’s closing stock price on October 3,
2011. For customers, vendors and employees, this transaction
expands the relationship with Sbar’s that goes back more than two
decades and provides a new foundation to support our business
initiatives.”
“Sbar’s is very excited about partnering with A.C. Moore to
build the most dynamic and exciting retailer in the arts and crafts
space,” said Pepe Piperno, Chief Executive Officer of Sbar’s. “We
are confident that Sbar’s expertise and history of innovation in
arts and crafts merchandising and sourcing will greatly benefit
A.C. Moore’s customers, vendors and employees.”
Under the terms of the agreement, an affiliate of Sbar’s will
commence a cash tender offer for all issued and outstanding shares
of A.C. Moore common stock at $1.60 per share, without
interest.
An affiliate of Sbar’s has received a financing commitment from
Wells Fargo Bank, National Association (“Wells Fargo”) to provide
the debt financing necessary to close the transaction. In addition,
concurrent with the execution of the agreement, a Sbar’s affiliate
has delivered $20 million in cash to be held in escrow and used to
fund the transaction, as set forth in an escrow agreement between
the parties and Wells Fargo as escrow agent.
The merger agreement requires that the tender offer commence
within 10 business days of October 3, 2011. The tender offer is
conditioned upon, among other things, satisfaction of the minimum
tender condition of approximately 70.7 percent of A.C. Moore’s
common stock, the receipt of funding under the financing commitment
and customary closing conditions. Following completion of the
tender offer, assuming the minimum tender condition is met, a
Sbar’s affiliate will acquire the remaining outstanding shares of
A.C. Moore common stock for $1.60 per share in cash, without
interest, through a second-step merger. If the minimum tender
condition is not met, and in certain other circumstances, the
parties have agreed to complete the transaction through a one-step
merger after receipt of A.C. Moore shareholder approval. The
one-step merger is conditioned upon, among other things, receipt of
funding under the financing commitment and customary closing
conditions. The acquisition is expected to close during the fourth
quarter of 2011. As a result of the transaction, A.C. Moore’s
common stock would no longer be publicly-owned or traded on the
NASDAQ market. Further details will be provided in filings with the
U.S. Securities and Exchange Commission (the “SEC”).
Janney Montgomery Scott LLC is acting as exclusive financial
advisor to A.C. Moore in connection with its review of strategic
alternatives and the transaction and has rendered a fairness
opinion to A.C. Moore’s Board of Directors in connection with the
transaction. Blank Rome LLP is acting as legal advisor to A.C.
Moore.
Bryan Cave LLP and Brown & Connery, LLP are acting as legal
advisors to Sbar’s in connection with the transaction.
A.C. Moore also reported that projections or predictions
provided by the Company during the fiscal year ending December 31,
2011 can no longer be relied upon and are withdrawn.
About A.C. Moore
A.C. Moore is a specialty retailer of arts, crafts and floral
merchandise for a wide range of customers. The Company currently
serves customers through its 134 stores located in the Eastern
United States and nationally via its e-commerce site,
www.acmoore.com. For more information about A.C. Moore, visit its
website at www.acmoore.com.
About Sbar’s
Sbar’s is one of the largest distributors in the United States
supplying arts and crafts merchandise, including its proprietary
Nicole Crafts products, to retailers. Sbar’s began in 1952 as a
small craft, hobby and school supply store in Camden, New Jersey
and today operates from its 300,000 square foot distribution center
located in Moorestown, New Jersey. In addition to being a
merchandise distributor, Sbar’s operates seven arts and crafts
stores located in the Richmond, Virginia area. For more information
about Sbar’s, visit its website at www.sbarsonline.com.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. In some cases, forward-looking statements can be identified
by words such as “anticipate,” “expect,” “believe,” “plan,”
“intend,” “predict,” “will,” “may” and similar terms.
Forward-looking statements in this press release include, but are
not limited to, statements regarding the anticipated timing of
filings relating to the transaction; statements regarding the
expected timing of the completion of the transaction; statements
regarding the ability to complete the transaction considering the
various closing conditions; statements regarding prospective
performance and opportunities; any statements of expectation or
belief; and any statements of assumptions underlying any of the
foregoing. The forward-looking statements contained in this press
release related to future results and events are based on the
Company’s current expectations, beliefs and assumptions about its
industry and its business. Forward-looking statements, by their
nature, involve risks and uncertainties and are not guarantees of
future performance. Actual results may differ materially from the
results discussed in the forward-looking statements due to a
variety of risks, uncertainties and other factors, including, but
not limited to, uncertainties as to the timing of the tender offer
and the merger; uncertainties as to how many of the Company’s
shareholders will tender their stock in the tender offer; the risk
that the transaction may not be approved by the Company’s
shareholders were the transaction to be consummated as a one-step
merger; the risk of litigation relating to the transaction; the
risk that competing offers will be made; the possibility that
various closing conditions for the transaction may not be satisfied
or waived; the effects of disruption from the transaction making it
more difficult to maintain relationships with employees, customers,
vendors or other business partners; other business effects,
including, but not limited to, the effects of industry, economic or
political conditions outside of the Company’s control; transaction
costs; actual or contingent liabilities; and other risks and
uncertainties discussed in documents filed with the SEC by the
Company, including, but not limited to, the
solicitation/recommendation statement and merger proxy statement to
be filed by the Company. Investors and shareholders are cautioned
not to place undue reliance on these forward-looking statements.
Unless required by law, the Company undertakes no obligation to
update any forward-looking statements, whether as a result of new
information, future events or otherwise. Readers are also urged to
review carefully and consider the various disclosures in the
Company’s SEC periodic and interim reports, including but not
limited to its Annual Report on Form 10-K, as amended, for the
fiscal year ended January 1, 2011, Quarterly Report on Form 10-Q
for the fiscal quarter ended April 2, 2011, Quarterly Report on
Form 10-Q for the fiscal quarter ended July 2, 2011 and Current
Reports on Form 8-K filed from time to time by the Company. All
forward-looking statements are qualified in their entirety by this
cautionary statement.
Notice to Investors
The tender offer for the outstanding common stock of the Company
referred to in this press release has not yet commenced. This press
release is neither an offer to purchase nor a solicitation of an
offer to sell any securities. The solicitation and the offer to buy
shares of the Company common stock will be made only pursuant to an
offer to purchase and related materials that the Sbar’s affiliate
intends to file with the SEC. At the time the offer is commenced,
the Sbar’s affiliate will file a tender offer statement on Schedule
TO with the SEC, and thereafter the Company will file a
solicitation/recommendation statement on Schedule 14D-9 with
respect to the offer. The tender offer statement (including an
offer to purchase, a related letter of transmittal and other offer
documents) and the solicitation/recommendation statement will
contain important information that should be read carefully and
considered before any decision is made with respect to the tender
offer. These materials will be sent free of charge to all
shareholders of the Company when available. In addition, all of
these materials (and all other materials filed by the Company with
the SEC) will be available at no charge from the SEC through its
website at www.sec.gov. Free copies of the offer to purchase, the
related letter of transmittal and certain other offering documents
will be made available by contacting D.F. King & Co., Inc., 48
Wall Street, 22nd Floor, New York, New York 10005 (for information
by telephone: Banks and Brokers Call Collect: (212) 269-5550; All
Others Call Toll-Free: (800) 755-7250. Investors and shareholders
also may obtain free copies of the documents filed with the SEC
from the Company by contacting David Stern, Chief Financial and
Administrative Officer, A.C. Moore Arts & Crafts, Inc., 130
A.C. Moore Drive, Berlin, New Jersey 08009, (856) 768-4943.
Additional Information about the Merger and Where to Find
It
In connection with the potential one-step merger, the Company
will file a proxy statement with the SEC. Additionally, the Company
will file other relevant materials with the SEC in connection with
the proposed acquisition pursuant to the terms of an Agreement and
Plan of Merger between the parties. The materials to be filed by
the Company with the SEC may be obtained free of charge at the
SEC’s web site at www.sec.gov. Investors and shareholders also may
obtain free copies of the proxy statement and other relevant
materials from the Company by contacting David Stern, Chief
Financial and Administrative Officer, A.C. Moore Arts & Crafts,
Inc., 130 A.C. Moore Drive, Berlin, New Jersey 08009, (856)
768-4943. Investors and security holders of the Company are urged
to read the proxy statement and the other relevant materials when
they become available before making any voting or investment
decision with respect to the proposed merger because they will
contain important information about the merger and the parties to
the merger.
The Company and its directors, executive officers and other
members of management and employees, under the SEC rules, may be
deemed to be participants in the solicitation of proxies of the
Company shareholders in connection with the proposed merger.
Investors and security holders may obtain more detailed information
regarding the names, affiliations and interests of certain of the
Company’s executive officers and directors in the solicitation by
reading the Company’s Proxy Statement for its 2010 Annual Meeting
of Shareholders and Annual Report on Form 10-K, as amended, for the
fiscal year ended January 1, 2011, as well as the proxy statement
and other relevant materials which will be filed with the SEC in
connection with the merger when they become available. Information
concerning the interests of the Company’s participants in the
solicitation, which may, in some cases, be different than those of
the Company’s shareholders generally, will be set forth in the
proxy statement relating to the merger when it becomes
available.
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