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99 Cents Only Accepts $1.6B Buyout

CITY OF COMMERCE, Calif. — 99 Cents Only Stores here said Tuesday that it has agreed to be acquired by a consortium of private investors led by Ares Management and the Canada Pension Plan Investment Board, along with its family majority owners.

The cash offer of $22 per share, or $1.6 billion, trumps a $1.4 billion buyout offer proposed in March by the Schiffer/Gold family and Leonard Green & Partners. That offer resulted in the formation of a special committee to explore investment options that led to the Ares/CPPIB deal, the company said. The deal, which would take the company private, requires the approval of shareholders and is expected to close early next year.

99 Cents Only operates 289 extreme value stores in California, Texas, Arizona and Nevada and posted annual sales of $1.4 billion in the fiscal year ended April 2. More than half of 99 Cents Only sales are from food and beverages.

Eric Schiffer, chief executive officer of 99 Cents Only, Jeff Gold, its president and chief operating officer and Howard Gold, its executive vice president, will retain their current roles and board positions. Founder David Gold will continue to serve as chairman emeritus.

Ares Management, Los Angeles, typically invests in middle market companies in need of growth capital. Its other investments include General Nutrition Centers, Maidenform Brands, floor and décor Outlets of America, Samsonite and Serta & Simmons Bedding. CPPIB, Toronto, invests on behalf of the Canada Pension Plan.