While many New Jersey companies have been struggling to maintain business as usual during the recession, one company has decided to allow itself to be acquired. A.C. Moore, the Berlin-based arts and crafts company, has agreed to a $40 million acquisition by an arts and crafts distributor, Sbar’s Inc.
A.C. Moore has 134 stores on the East coast and stores in New Jersey. In addition, A.C. Moore maintains an online ordering website.
This acquisition is good news for this struggling company that has been trying to strategize about its best options. The New Jersey company has struggled financially during the recession as customers continue to cut back on non-essential items such as arts and crafts supplies. As a result, A.C. Moore has struggled for some time. In fact, since the beginning of the tough economic climate in 2007, the company has not reported a positive quarter.
And things had not gotten better since then for A.C. Moore. As a result, ever since January of this year the company has been reviewing its potential options.
As part of the acquisition agreement, Sbar’s will pay $1.60 per share for the 25.5 million outstanding shares. This represents a premium to A.C. Moore over its current closing price per share just prior to the news of the acquisition.
Subsequent to the news release that the company will be acquired, the shares rose more than 60 percent. However, even with this gain the price per share is much lower than the company’s highest trading price in March of this year, which was more than twice this amount.
A.C. Moore’s board of directors believes that this acquisition makes the most financial sense. The board feels that the key shareholders will benefit from this business transaction as it is their best option considering the grim outlook for the struggling company.
Source: Bloomberg Businessweek, “A.C. Moore agrees to be acquired for $40.8M,” Oct. 4, 2011