Party City Announces Sale of Canadian Subsidiary Retail Business and Assets to Canadian Tire and Agrees to a Related Long-Ter...
08 August 2019 - 8:00PM
Party City Holdco Inc. (NYSE: PRTY) (“Party City” or the
“Company”), today announced that it has entered into a definitive
agreement with Canadian Tire Corporation, Limited (TSX: CTC)
(“Canadian Tire”), whereby Canadian Tire will acquire the retail
business and assets of Party City’s Canadian subsidiary. As
part of this transaction, Canadian Tire will acquire 65 retail
store locations in Canada in an all-cash transaction valued at
approximately CAD$174 million. The 2018 pro forma EBITDA of
these 65 locations totaled approximately CAD$17.6 million.
In connection with the agreement, Party City and Canadian Tire
have also agreed to a long-term wholesale supply agreement, with an
initial term of 10 years. Under the terms of the supply
agreement, Party City’s wholesale business, Amscan Inc. (“Amscan”),
will provide Canadian Tire with consumer products. As one of
the top Canadian retail companies, Canadian Tire will be a marquee
customer, particularly as it executes its growth strategies.
Party City anticipates that the supply agreement will effectively
double Amscan’s average annual wholesale shipments into the
Canadian marketplace during the term of the agreement.
“We are extremely excited to enter into this transaction with
Canadian Tire, which is widely recognized as a premier retailer in
Canada,” said James M. Harrison, Chief Executive Officer of Party
City Holdco Inc. “Over the last 14 years, we have
successfully executed on our strategy to grow our portfolio of
stores in North America and pursue strategic partnerships
internationally with leading retail partners. This
transaction enables us to achieve both objectives, particularly as
we partner with Canadian Tire to grow the Party City brand
throughout Canada. We view this investment by Canadian Tire
as a true endorsement of the Party City retail concept and the
party category overall. More importantly, we are pleased and
proud to partner with them through this long-term wholesale supply
agreement, which positions us as their primary resource for party
and related consumer products and innovation.”
The proceeds from the sale will be used to pay down debt as part
of the Company’s stated strategic goal of significantly reducing
its net debt leverage over the next several years.
The transaction, which has been unanimously approved by Party
City’s Board of Directors, is subject to customary closing
conditions and is expected to close by October 1, 2019.
About Party CityParty 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. Party City Holdco 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 prior to this transaction include
over 900 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.
Contacts
Investor RelationsICRFarah Soi and Rachel
Schacter203-682-8200InvestorRelations@partycity.com
Media RelationsSard Verbinnen & CoDavid Isaacs / Cameron
Seligmann 415-618-8750 /
212-687-8080PartyCity-SVC@sardverb.com
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