Craft retailer The Michaels Companies Inc. (Nasdaq: MIK) announced an acquisition on Tuesday: a $150 million purchase of Ohio-based Lamrite West Inc.
Founded in 1954, Lamrite is a wholesale distributor of craft products to craft, party, toy, drug and grocery stores. It also operates 34 Pat Catan’s Craft Centers in Ohio, Pennsylvania, Michigan and West Virginia. Like Michaels stores, Pat Catan’s sells arts and crafts supplies and offers crafting classes and events.
The company and its employees will remain at Lamrite’s Ohio headquarters and operate as a distinct business within Michaels. Lamrite CEO Michael Catanzarite, whose father founded the company, will retain his role and serve on Michaels’ executive committee.
“The acquisition of Lamrite West represents a unique opportunity to add a business to the Michaels portfolio that will strategically enhance our private brand development capabilities, accelerate our direct sourcing initiatives, and strengthen our business-to-business capabilities,” Michaels chairman and CEO Chuck Rubin said in a prepared statement.
Besides purchase accounting adjustments and integration expenses, Irving-based Michaels said it expects the transaction to have no impact on diluted earnings per share in 2016. It is expected to be accretive to 2017 earnings per share.
Additional details of the transaction will be discussed when the company reports its fourth quarter and fiscal 2015 earnings before the market opens on March 17. Michaels representatives said the company is not providing interviews or additional information prior to the earnings release.
On the heels of the acquisition announcement, investors sent Michaels stock tumbling. In early trading Tuesday, its shares had fallen to $21.89, 2.1 percent below Monday’s closing price of $22.36. Over the past year, the retailer’s stock is down 18.3 percent.
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