Party City Holdco Inc. (the “Company” or “Party City”; NYSE:PRTY)
today announced that it has entered into a definitive agreement to
sell a substantial portion of its international operations (“Amscan
International”) to Endless LLP, a U.K. based private equity
investor (“Endless”), for a total transaction value of
approximately US$59 million, including US$45 million of cash
proceeds and approximately US$14 million of excess cash and other
adjustments to be returned to the Company. The business being sold
includes Party City’s international wholesale, retail and
e-commerce businesses in the U.K., Ireland, Germany, Australia, New
Zealand and Asia, which operate under a number of trade names,
including Amscan International, Party Delights, and Livario, as
well as several website brands in Europe.
As part of the agreement, Party City and Amscan International
will also form a joint venture partnership for Party City’s costume
sourcing and manufacturing business in Asia, currently part of
Amscan Asia. Party City will retain its other existing sourcing
operations.
“We believe this transaction represents another positive step in
our transformation strategy,” said Brad Weston, Chief Executive
Officer of Party City. “The sale of these assets enables us to
focus on our core North American retail and wholesale operations,
where we see the greatest opportunities for profitable growth,
while maintaining the benefits of our vertically integrated
structure. We are excited about the progress we are making to
reinforce our position as the leading party platform in North
America.”
Mr. Weston continued, “Endless has a strong track record of
supporting international consumer-oriented businesses, and we
believe they are the right partner to take Amscan International
into the future. We believe that this transaction will be seamless
for global customers and vendors and create new opportunities for
our associates, who work so hard every day to help our customers
continue to inspire celebrations, even in this challenging
environment.”
Matthew Jubb, Partner at Endless, said, “We are delighted to
have reached an agreement to acquire Amscan International, which we
believe is a hugely exciting opportunity for us. We look forward to
backing the management team with their exciting vision for the
future development of the business. We look forward to sharing more
details following completion.”
Additional Transaction Details
The business being sold will be led by Amscan International’s
existing management team of Gary Panons, CEO of Amscan
International, and Joe Hennigan, CFO/COO of Amscan
International.
The joint venture for the costume sourcing and manufacturing
business will include Party City’s costume product development,
sampling and sourcing in Asia and its manufacturing in Madagascar.
It will be governed by a Board of Directors consisting of members
from both Party City and Amscan International.
Party City will continue to sell foil balloons and party
products into the international territory through supply agreements
with Amscan International. Coupled with the continuation of its
other existing sourcing operations, Party City expects its supply
chain to remain unchanged following the transaction.
The transaction is expected to close by the end of calendar year
2020, subject to customary approvals and closing conditions.
Party City intends to use the transaction proceeds and returned
excess cash for general corporate purposes.
Kurzman Eisenberg Corbin & Lever, LLP is serving as Party
City’s legal counsel in the US, and Osborne Clarke is serving as
legal counsel in the UK.
About Party City
(NYSE: PRTY)Party
City Holdco Inc. is the leading party goods company by revenue in
North America and, we believe, the largest vertically integrated
supplier of decorated party goods globally by revenue. The Company
is a popular one-stop shopping destination for party supplies,
balloons, and costumes. In addition to being a great retail brand,
the Company is a global, world-class organization that combines
state-of-the-art manufacturing and sourcing operations, and
sophisticated wholesale operations complemented by a multi-channel
retailing strategy and e-commerce retail operations. The Company is
the leading player in its category, vertically integrated and
unique in its breadth and depth. The Company designs, manufactures,
sources and distributes party goods, including paper and plastic
tableware, metallic and latex balloons, Halloween and other
costumes, accessories, novelties, gifts and stationery throughout
the world. The Company's retail operations include approximately
850 specialty retail party supply stores (including franchise
stores) throughout North America operating under the names Party
City and Halloween City, and e-commerce websites, principally
through the domain name PartyCity.com.
Forward-Looking StatementsThis press release
contains forward-looking statements. Forward-looking statements
give current expectations or forecasts of future events or our
future financial or operating performance, including Party City’s
expectations regarding its belief that the transaction represents a
positive step in the Party City’s transformation strategy, the
belief that North American retail and wholesale operations are the
greatest opportunities for profitable growth and that the
transaction will be seamless for global customers and vendors and
will create new opportunities for Party City’s associates. The
forward-looking statements contained in this press release are
based on management's good-faith belief and reasonable judgment
based on current information, and these statements are qualified by
important risks and uncertainties, many of which are beyond our
control, that could cause our actual results to differ materially
from those forecasted or indicated by such forward-looking
statements. These risks and uncertainties include: potential risks
and uncertainties relating to the ultimate geographic spread of
COVID-19; the severity of the COVID-19 pandemic; the duration of
the COVID-19 pandemic; actions that may be taken by governmental
authorities to contain the COVID-19 pandemic or to treat its
impact; the potential negative impacts of COVID-19 on the global
economy and foreign sourcing; the impacts of COVID-19 on our
financial condition and business operation; our ability to compete
effectively in a competitive industry; fluctuations in commodity
prices; our ability to appropriately respond to changing
merchandise trends and consumer preferences; successful
implementation of our store growth strategy; decreases in our
Halloween sales; the impact of helium shortages on our financial
performance; disruption to the transportation system or increases
in transportation costs; product recalls or product liability;
economic slowdown affecting consumer spending and general economic
conditions, including as a result of the COVID-19 pandemic; loss or
actions of third party vendors and loss of the right to use
licensed material; disruptions at our manufacturing facilities; and
the additional risks and uncertainties set forth in “Risk Factors”
in Party City’s Annual Report on Form 10-K for the year ended
December 31, 2019 and in subsequent reports filed with or furnished
to the Securities and Exchange Commission. Although we believe that
the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future events, outlook, guidance,
results, actions, levels of activity, performance or achievements.
Readers are cautioned not to place undue reliance on these forward
looking statements. Except as may be required by any applicable
laws, Party City assumes no obligation to publicly update or revise
such forward-looking statements, which are made as of the date
hereof or the earlier date specified herein, whether as a result of
new information, future developments or otherwise.
Contacts
Investor RelationsFarah Soi / Rachel
SchacterICR203-682-8200InvestorRelations@partycity.com
Media RelationsLeigh Parrish /
Barrett Golden / Andrew SquireJoele Frank, Wilkinson Brimmer
Katcher212-355-4449
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