The retail discount chain 99 Cents Only Stores has announced its entering into a definitive acquisition agreement by affiliates of Ares Management and Canada Pension Plan Investment Board (CPPIB). Purchased for $1.6 billion or $22.00 per share, 99 Cents Only Stores will continue to be managed by members of the Gold/Schiffer family who will continue to hold a significant minority stake in ownership.
As management, CEO Eric Schiffer, President and COO Jeff Gold and EVP Howard Gold will continue their roles while Founder David Gold will serve as Chairman Emeritus.
"I am pleased to announce this agreement as it delivers significant value to our shareholders," said Eric Schiffer, CEO. "We have come to know and respect Ares Management and CPPIB through this process and we believe they will be excellent partners and help us achieve our long term goals as a company. We look forward to continuing to deliver extreme value to our customers and providing a great place to work for our 99ers."
The Canadian Pension Plan Investor Board is an investment management committee that invests surplus funds not needed by the Canada Pension Plan. This purchase was made from the CPPIB’s strategy to enter into partnership investment.
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"We are pleased to be partnering with the Gold/Schiffer family and Ares in making this investment in 99 Cents Only Stores, which has a strong market position and attractive store economics in a growing retail sector," said Andre Bourbonnais, Senior Vice-President, Private Investments of CPPIB. "This investment is consistent with our strategy of investing alongside strong partners in an asset that we believe is well positioned for the long term and has shown good performance in various economic environments."
The acquisition is still tentative as the transaction requires an affirmative vote from shareholders. 99 Cents Only Stores expects the transaction to close during the first quarter of 2012.