August 9, 2022

DealBook: BJ’s Wholesale Agrees to $2.8 Billion Buyout

A BJ's Wholesale store in Dedham, Mass.Steven Senne/Associated PressA BJ’s Wholesale store in Dedham, Mass.

BJ’s Wholesale Club said on Wednesday that it would sell itself to the private equity firms Leonard Green Partners and CVC Capital Partners for $2.8 billion in cash, wrapping up a months-long sale process.

Under the terms of the deal, the buyout firms will pay $51.25 a share for the warehouse retailer, a 6.6 percent premium to BJ’s closing price of $48.08 on Tuesday.

It is also 38 percent higher than BJ’s stock price on June 30 last year, the day before Leonard Green announced that it owned a 9.5 percent stake in the company.

“BJ’s will benefit from the continued execution of our business plan and the significant retail expertise of our new partners at LGP and CVC, as well as from continued investments in our clubs, our people and technology, and the future of our business,” Laura Sen, BJ’s chief executive, said in a statement.

The deal announced Wednesday is the latest private equity transaction in retail. Leonard Green has been among the most active buyers in the sector over the last year, and its takeovers have included Jo-Ann Stores and, with TPG Capital, J. Crew. CVC also owns a number of retailers, including C1000 of the Netherlands and Cortefiel of Spain.

Leonard Green put BJ’s in play last year when it made a quiet takeover proposal for the company, prompting the retailer to hire Morgan Stanley to run an auction process. BJ’s acknowledged in February that it was up for sale. Last month, Leonard Green and CVC disclosed in a regulatory filing that they had made a bid for BJ’s.

The deal is expected to close in the fourth quarter, pending a vote by BJ’s shareholders.

In addition to Morgan Stanley, BJ’s was also advised by the law firm Wilmer Cutler Pickering Hale Dorr. Leonard Green and CVC were advised by Deutsche Bank, Citigroup, Barclays Capital and Jefferies Company. Those banks, along with GE Capital and Wells Fargo, also provided financing.

The buyout firms received legal counsel from Latham Watkins and Simpson Thacher Bartlett.

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