Unlike what often happens after mergers, Pat Catan's 34 arts and crafts stores in Ohio, Pennsylvania, Michigan, and West Virginia will continue to operate independently under The Michaels Companies.
CLEVELAND, Ohio -- Pat Catan's Craft Centers, the locally-founded, family-run crafts and decor retailer, has been acquired by the Michaels Companies Inc., the largest arts and crafts retailer in North America, for $150 million.
Michaels said Lamrite West, the name of the company Pat Catanzarite founded in 1954 to supply craft supplies, window displays and decorations to Cleveland department stores like Higbee's, Halle's, Linders and Rosenbloom, will keep its team and its Strongsville headquarters. Lamrite is now an international wholesaler and retail supplier of arts and crafts.
And unlike what often happens after mergers, Pat Catan's 34 arts and crafts stores in Ohio, Pennsylvania, Michigan, and West Virginia will continue to operate independently under Michaels, as will its wholesale business, called Darice Inc. Pat Catan's 1,600 employees will all keep their jobs, a spokeswoman said.
Pat Catan's has 16 stores in Northeast Ohio, including locations in Akron, Amherst, Austintown, Bedford, Boardman, Cleveland, Cuyahoga Falls, North Canton, North Ridgeville, Painesville, Parma, Strongsville, Warren, Westlake, Willowick, and Wooster.
Lamrite West Chief Executive Michael Catanzarite, Pat's son, will stay on as CEO and join Michaels' executive committee.
Pat Catan's acquisition comes nearly five years after Hudson-based Jo-Ann Stores, the fabrics and crafts retailer started by two Cleveland families in 1943, was acquired by Leonard Green & Partners LP, a Los Angeles private equity firm, in a cash deal valued at $61 per share, or about $1.6 billion.
Jo-Ann Fabric and Craft Stores, a major rival of Michaels, now operates more than 850 stores in 49 states, as well as e-commerce site Joann.com, and three distribution centers in Hudson, Visalia, California, and Opelika, Alabama. Jo-Ann employs more than 23,000 nationwide.
As of Oct. 31, 2015, Michaels owned and operated 1,196 Michaels stores in 49 states and Canada, as well as 118 Aaron Brothers stores, and produced 12 exclusive private brands.
Pat Catan's announced its acquisition by Michaels on its website Wednesday morning, Feb. 3. "We are very excited to announce we are joining The Michaels Companies!" Pat Catan's announced on its website. "We're looking forward to this next chapter in our company and family history.
"Our 34 stores will continue to be called Pat Catan's and will remain open. You won't be able to use your Michaels coupon at Pat Catan's or vice versa (sorry about that one!)," the statement said.
"And so, while we're joining a bigger company, one thing will never change: For over 60 years, Pat Catan's Stores have been your choice for creativity and customer service. You will always be able to count on that!"
Michaels said the acquisition will not impact profits per share in fiscal 2016, but would contribute to earnings in fiscal 2017. Michaels reported $4.7 billion in sales in fiscal 2014.
Michaels said it would provide more details when it releases its fourth-quarter and fiscal 2015 year-end earnings on March 17.
"The acquisition of Lamrite West represents a unique opportunity to add a business to the Michaels portfolio that will strategically enhance our private brand development capabilities, accelerate our direct sourcing initiatives, and strengthen our business-to-business capabilities," Chairman and Chief Executive Chuck Rubin said in a written announcement.
"As CEO of Lamrite West, Mike Catanzarite has built a strong leadership team and cultivated a pervasive culture of customer service. Together, we will serve our combined customer base better to help us achieve our long-term growth goals," he said.
Catanzarite said in the same statement that "I have long admired the Michaels team, and with the full weight of Michaels resources, I know that our employees and customers will realize tangible benefits from this combination."
Michaels' shares closed at $21.54 on Wednesday, down 2 percent from Tuesday's final price of $22.08.