$360M Party City sale is announced

Real Estate Weekly, Oct 12, 2005

Berkshire Partners LLC and Weston Presidio, through their holding company AAH Holdings Corporation, announced that they have entered into a definitive agreement to acquire Party City Corporation.

Under the terms of the agreement, Party City shareholders will receive $17.50 per share in cash for each share of common stock outstanding for total consideration of approximately $360 million, which includes the cash-out of employee stock options and warrants. Certain shareholders of Party City, beneficially owning over 27% of its common stock, have entered into voting agreements in support of the transaction.

Party City's Board of Directors unanimously approved the transaction and has recommended to Party City's stockholders that they approve the transaction.

Headquartered in Rockaway, New Jersey, Party City is America's largest party goods chain. Founded in 1986, the Company has grown from a one-stop party store to a leading retailer of party supplies with 249 company-owned stores and 250 franchise locations, representing one third of all party superstore locations in the U.S. For the fiscal year ended July 2, 2005, Party City reported revenues of approximately $500 million, and total chain-wide net sales of approximately $1.0 billion.

"Over the past 20 years, Party City has grown to become the largest retailer in the party goods industry. We are encouraged and excited by the enthusiasm that Berkshire Partners and Weston Presidio have shown for our business," said Michael Tennenbaum, Chairman of the Executive Committee of Party City. "We believe that this transaction will create significant opportunities for Party City's customers, employees and franchisees that we could not have capitalized on as a standalone company. At the same time, the shareholders will realize an attractive selling price."