Michaels Stores Inc. (MIK:US), the arts and crafts retailer owned by Blackstone Group LP (BX:US) and Bain Capital LLC, is preparing to file for an initial public offering as soon as next week, according to a person with knowledge of the situation.
Michaels plans to sell shares in the second quarter and picked JPMorgan Chase & Co. (JPM:US) and Goldman Sachs Group Inc. (GS:US) to run the IPO, said two people, who declined to be identified because the matter is private. Reuters reported on the planned sale earlier today.
Private-equity firms are facing pressure from clients to sell investments and return capital after fears of global recession stymied so-called exits during the second half of 2011. U.S. firms are holding companies longer than they have in more than a decade, hurting fund returns and setting the stage for exit activity to increase this year, according to a February report by researcher PitchBook Data Inc.
About $1.6 trillion in leveraged buyouts were completed from 2005 to 2007, according to Preqin Ltd., a London-based research firm, the biggest buyout boom on record.
For companies buyout firms sold or took public in 2011, the median holding period was 4.81 years, or 25 percent higher than before the 2008 financial crisis, the PitchBook report showed. Private-equity firms have made more than 12,500 investments since 2002 yet have realized fewer than 3,500, the company said last month.
Michaels Stores became a publicly held company in 1984, according to its website, with 16 stores located primarily in Texas. Bain and Blackstone bought the retailer in 2006 in a deal valued at about $6 billion. As of March 14, Michaels owned and operated 1,066 Michaels stores in 49 U.S. states and Canada and 130 Aaron Brothers stores.
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