All-Cash Hellman & Friedman Transaction to
Deliver Immediate and Substantial Value for All At Home
Stockholders
Special Committee Carefully Evaluated Financial
Projections Through Fiscal 2026
Transaction Result of Vigorous Negotiations
Provides Update on Go-Shop Process
At Home Group Inc. (“At Home” or “the Company”) (NYSE: HOME),
the home décor superstore, today announced that it has filed its
preliminary proxy materials with the Securities and Exchange
Commission (“SEC”) in connection with At Home’s pending transaction
with funds affiliated with Hellman & Friedman (“H&F”), a
premier global private equity firm. The preliminary proxy statement
is available on the investor relations section of the Company’s
website at investor.athome.com and the SEC's website at
www.sec.gov.
As previously announced on May 6, 2021, under the terms of the
H&F agreement, At Home stockholders will receive $36.00 in cash
for each share of At Home common stock they hold in a transaction
valued at approximately $2.8 billion, including the assumption of
debt.
Highlights from the preliminary proxy filing include:
- Highly Attractive, Guaranteed Valuation and Premium. The
H&F transaction delivers a significant premium of approximately
25% to the 30-day volume weighted average share price and delivers
$36.00 per share in cash – a premium of approximately 17% to the
Company’s closing stock price of $30.67 on May 4, 2021, the last
trading day prior to media speculation regarding a possible
transaction. It also:
- Delivers a premium of approximately 29% to the 60-day volume
weighted average share price and a premium of approximately 43% to
the 90-day volume weighted average share price; and
- Reflects a highly attractive Price-to-Earnings (P/E) multiple
of fiscal year 2022 earnings – 18.7x At Home management’s 2022
earnings per share forecast and 22.3x the IBES consensus.
- Thorough and Robust Process, Which Led to Five Separate
Price Increases. As the preliminary proxy statement describes
in detail, the Company exhaustively explored a sale in the first
half of 2019. Despite soliciting bids from financial sponsors and
strategic buyers, and media speculation that the Company was
exploring a sale, H&F was the only party to submit a bid. In
December 2020, the Board formed a Special Committee of independent
directors that also engaged independent financial and legal
advisors. The value created by the transaction is the result of
vigorous negotiations by the Special Committee of the Board,
including:
- The Special Committee’s negotiations with H&F led to five
separate price increases from H&F’s initial bid of $32.00 per
share to its final bid of $36.00 per share and favorable terms to
At Home that the Board determined maximized value for all At Home
stockholders.
- As previously disclosed, the merger agreement also provides for
a 40-day go-shop. As of June 1, 2021, Goldman Sachs, the Special
Committee’s independent financial advisor, contacted 17 financial
sponsors and 7 strategic parties pursuant to the go-shop. One of
these parties has entered into a non-disclosure agreement with the
Company but has not made any proposal to date. Each of the other
parties declined to pursue a potential transaction involving the
Company. Goldman Sachs has received no inbound inquiries from other
third parties.
- Comprehensive Evaluation of the Company’s Long-Term Business
Plan and Prospects. As part of their evaluation, the Special
Committee and the Board carefully analyzed the value the Company is
expected to derive from its standalone plan. Management’s five-year
projections are detailed in the preliminary proxy statement.
- Despite achieving record results for the first quarter of
fiscal 2022, driven in part by a larger than expected U.S. federal
stimulus tailwind, the Special Committee and the Board believed
that the Company’s longer-term outlook through fiscal 2026 remained
largely unchanged and that there are significant external risks to
the Company’s business plan.
- The risks include, but are not limited to, increased freight
costs, potential changes in corporate tax rates and the federal
minimum wage, risks to the Company’s supply chain, and the
potential for a significant shift in consumer spending as the
COVID-19 pandemic eases. The Special Committee and the Board also
considered the operating costs for planned new store openings,
which may not be achievable, as well as the associated margin
headwind.
- The Special Committee and the Board considered that the Company
would need to meet or exceed the business plan and achieve a
multiple at which At Home as a public company has not seen on a
consistent basis since early 2019 in order to generate
significantly greater value through execution of its standalone
strategy, while remaining subject to the external risks and
uncertainties inherent in the business plan, as compared to the
certain, immediate, and liquid all cash value of $36.00 per share
offered by the proposed H&F transaction.
The At Home Board of Directors and Special Committee unanimously
believe this transaction is the optimal path forward and in the
best interest of its stockholders.
Phil Francis, At Home’s Lead Independent Director and Chair of
the Special Committee of the Board of Directors, speaking on behalf
of the Special Committee, said, “The At Home Board is committed to
maximizing stockholder value and acting in the best interests of
the Company and all our stockholders. H&F is an ideal partner,
and the Board has great confidence in the benefits of this
transaction. Before announcing our agreement with H&F, the
Board carefully considered At Home’s opportunities and risks, both
pre-and post-pandemic. Looking ahead, we expect consumer spending
in the home category to moderate as consumers shift part of their
spending towards services, and we expect continuing challenges with
significantly elevated freight costs and other potential cost
increases. The Special Committee determined that the H&F
transaction provides substantial, guaranteed and immediate value to
all our stockholders.”
Advisors
Goldman Sachs & Co. LLC is serving as exclusive financial
advisor and Fried, Frank, Harris, Shriver & Jacobson LLP as
legal counsel to the Special Committee.
About At Home
At Home (NYSE: HOME), the home decor superstore, offers over
50,000 on-trend home products to fit any budget or style, from
furniture, mirrors, rugs, art and housewares to tabletop, patio and
seasonal decor. At Home is headquartered in Plano, Texas, and
currently operates 226 stores in 40 states. For more information,
please visit us online at investor.athome.com.
Additional Information and Where to Find It
This communication may be deemed to be solicitation material in
respect of the proposed acquisition of At Home Group Inc. (the
“Company”) by an affiliate of Hellman & Friedman. In connection
with the proposed merger, the Company will file with the Securities
and Exchange Commission (“SEC”) and furnish to its stockholders a
proxy statement and other relevant documents. STOCKHOLDERS OF THE
COMPANY ARE ADVISED TO READ THE PROXY STATEMENT WHEN IT BECOMES
AVAILABLE (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO)
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Investors may obtain
a free copy of the proxy statement (when it becomes available) and
other relevant documents filed by the Company with the SEC at the
SEC’s Web site at http://www.sec.gov. The proxy statement and such
other documents once filed by the Company with the SEC may also be
obtained for free from the Investor Relations section of the
Company’s web site (http://investor.athome.com/) or by directing a
request to: the Company, 1600 East Plano Parkway, Plano, Texas,
75074, Attention: Investor Relations. Copies of documents filed by
the Company with the SEC may also be obtained for free at the SEC’s
Web site at http://www.sec.gov.
Participants in Solicitation
The Company and its officers and directors may be deemed to be
participants in the solicitation of proxies from the stockholders
of the Company in connection with the proposed merger. Information
about the Company’s executive officers and directors is set forth
in the Company’s Annual Report on Form 10-K, which was filed by the
Company with the SEC on March 24, 2021, and the proxy statement for
the Company’s 2021 annual meeting of stockholders, which was filed
with the SEC by the Company on May 4, 2021. Investors may obtain
more detailed information regarding the direct and indirect
interests of the Company and its executive officers and directors
in the proposed merger by reading the preliminary and definitive
proxy statement regarding the proposed merger when it is filed with
the SEC. When available, investors may obtain free copies of these
documents as described in the preceding paragraph.
Forward-Looking Statements
This communication contains forward-looking statements made
pursuant to and within the meaning of the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. You can
generally identify forward-looking statements by the Company’s use
of forward-looking terminology such as “anticipate”, “are
confident”, “assume”, “believe”, “continue”, “could”, “estimate”,
“expect”, “intend”, “look ahead”, “look forward”, “may”, “might”,
“on track”, “outlook”, “plan”, “potential”, “predict”, “reaffirm”,
“seek”, “should”, “trend”, “will”, or “vision”, or the negative
thereof or comparable terminology regarding future events or
conditions. The forward-looking statements are not historical
facts, and are based upon the Company’s current expectations,
beliefs, estimates and projections, and various assumptions, many
of which, by their nature, are inherently uncertain and beyond its
control. There can be no assurance that management’s expectations,
beliefs, estimates and projections will be achieved and actual
results may differ materially from what is expressed in or
indicated by the forward-looking statements.
Forward-looking statements are subject to significant known and
unknown risks and uncertainties that may cause actual results,
performance or achievements in future periods to differ materially
from those assumed, projected or contemplated in the
forward-looking statements, including, but not limited to, the
following factors: the ongoing global COVID-19 pandemic and related
challenges, risks and uncertainties, including historical and
potential future measures taken by governmental and regulatory
authorities (such as requiring store closures), which have
significantly disrupted the Company’s business, employees,
customers and global supply chain, and for a period of time,
adversely impacted its financial condition (including resulting in
goodwill impairment) and financial performance, and which
disruption and adverse impacts may continue in the future; the
recent and ongoing direct and indirect adverse impacts of the
global COVID-19 pandemic to the global economy and retail industry;
the eventual timing and duration of economic stabilization and
recovery from the COVID-19 pandemic, which depends largely on
future developments; general economic conditions in the United
States and globally, including consumer confidence and spending,
and any changes to current favorable macroeconomic trends of strong
home sales, nesting and de-urbanization (which were enhanced and
accelerated due to COVID-19, and may not continue upon a successful
vaccine rollout in significant numbers that impacts consumer
behavior); the Company’s indebtedness and its ability to increase
future leverage, as well as limitations on future sources of
liquidity, including debt covenant compliance; the Company’s
ability to implement its growth strategy of opening new stores,
which was suspended for fiscal 2021 (with the exception of stores
that were at or near completion) and, while ramping significantly,
will be limited in the near term; the Company’s ability to
effectively obtain, manage and allocate inventory, and satisfy
changing consumer preferences; increasing freight and
transportation costs (including the adverse effects of
international equipment shortages) and increasing commodity prices;
the Company’s reliance on third-party vendors for a significant
portion of its merchandise, including supply chain disruption
matters and international trade regulations (including tariffs)
that have, and may continue to, adversely impact many international
vendors; the loss or disruption to operating the Company’s
distribution network; significant competition in the fragmented
home décor industry, including increasing e-commerce; the
implementation and execution of the Company’s At Home 2.0 and
omnichannel strategies and related investments; natural disasters
and other adverse impacts on regions in the United States where the
Company has significant operations; the Company’s success in
obtaining favorable lease terms and of its sale-leaseback strategy;
the Company’s reliance on the continuing growth and utility of its
loyalty program; the Company’s ability to attract, develop and
retain employee talent and to manage labor costs; the
disproportionate impact of its seasonal sales activity to its
overall results; risks related to the loss or disruption of the
Company’s information systems and data and its ability to prevent
or mitigate breaches of its information security and the compromise
of sensitive and confidential data; the Company’s ability to comply
with privacy and other laws and regulations, including those
associated with entering new markets; and the significant
volatility of the trading price of the Company’s common stock; the
possibility that the Company may be unable to obtain required
stockholder approval or that other conditions to closing the
proposed merger may not be satisfied, such that the proposed merger
will not close or that the closing may be delayed; general economic
conditions; the proposed merger may involve unexpected costs,
liabilities or delays; risks that the transaction disrupts current
plans and operations of the Company; the outcome of any legal
proceedings related to the proposed merger; the occurrence of any
event, change or other circumstances that could give rise to the
termination of the merger agreement. For more details on these and
other potential risks and uncertainties, please refer to the proxy
statement when filed and the documents that the Company files with
the SEC. You are cautioned not to place undue reliance on the
forward-looking statements included herein, which speak only as of
the date hereof or the date otherwise specified herein. Except as
required by law, the Company does not undertake any obligation to
update or revise any forward-looking statements for any reason,
whether as a result of new information, future events or
otherwise.
HOME-F
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210602005413/en/
Investor Relations:
Arvind Bhatia, CFA / 972.265.1299 / ABhatia@AtHome.com
Bethany Johns / 972.265.1326 / BJohns@AtHome.com
Proxy Solicitor:
Dan Burch / Bob Marese MacKenzie Partners, Inc. 212.929.5500
Media:
Carey Marin / 214.914.1157 / MediaRelations@AtHome.com
Or
Sharon Stern / Adam Pollack / Joseph Sala Joele Frank, Wilkinson
Brimmer Katcher 212.355.4449
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