WESTLAKE, Ohio -- American Greetings Corp. and Clayton, Dubilier & Rice announced an agreement today for CD&R-managed funds to acquire a 60 percent ownership stake in American Greetings.
Jacob Sapirstein, Founder-Chairman of American Greetings in this 1980 photo.
The Westlake company was founded as Sapirstein Greeting Card Co. in 1906 by Polish immigrant Jacob Sapirstein. Members of the family have operated the company since its inception. Terms of the deal were not disclosed, but the companies report that the Weiss Family will retain a 40 percent stake in the business.
"We anticipate business as usual. Current management of AG is expected to remain in place. And this transaction will not disrupt product, supply, or any other aspect of the business," said Patrice Molnar, American Greetings director of corporate communications. "It was important to the Weiss family to choose an investment partner who shares their commitment to the business."
Executives participate in a ribbon-cutting ceremony for the 2016 opening of American Greetings' new headquarters and creative studio in Crocker Park
In 2013, American Greetings ended more than 50 years of operations as a public company, with a buyout from the greeting-card maker's founding family. Three years later, the nation's second-largest greeting card company, opened its new headquarters near Crocker Park after relocating from Brooklyn. About 1,700 employees work at the five-story, 660,000-square-foot building developed by Stark Enterprises of Cleveland.
But investors and American Greetings say the greeting card company has the No. 1 position by volume in the $6 billion North American greeting card market, with several iconic brands, including American Greetings, Papyrus, Recycled Paper Greetings, Gibson, and Carlton Cards. The company currently sells products to more than 60,000 retail stores and maintains a portfolio of 440 patents, more than 2,500 copyrights, and 1,000 trademarks.
"American Greetings is a clear market leader with a strong portfolio of valuable brands," CD&R Partner Ken Giuriceo said in a statement. "We are very pleased to partner with the Weiss Family and American Greetings' talented management team and to be aligned around a set of identified actions to strengthen the company's competitive positioning and prospects for sustainable, long-term growth and profitability."
The companies are just at the signing stage, but expect the deal to close in the next 45 days.
Upon the close of the transaction, John Beeder, current president and chief operating officer, will become chief executive officer. Zev Weiss and Jeffrey Weiss, current co-CEOs and Morry Weiss, current chairman, will be on the Board. David Scheible, an operating advisor to CD&R funds and former chairman and chief executive officer of Graphic Packaging, will assume the role of chairman of American Greetings.
"We checked our annual reports, which began in 1953, and we have always had a family member or descendent of Jacob Sapirstein in the role of CEO (a title we began using in the 70's. Until that point, it was president)," Molnar said late Tuesday. "John Beeder is the first non-family member CEO."
John Compton, a CD&R operating partner and former president of Pepsico, will be actively involved with the business and serve on the company's Board.
"We believe the deep operating expertise that Clayton, Dubilier & Rice brings to us makes them an ideal strategic partner," Zev Weiss said in a statement.
"They have an outstanding track record of success and a strong reputation for trustworthiness and operational leadership and we look forward to working closely together and continuing to serve the interests of American Greetings' customers, employees, and suppliers," added Jeffrey Weiss in the statement.
Founded in 1978, Clayton, Dubilier & Rice is a private investment firm. Since inception, CD&R has managed the investment of $25 billion in 78 companies with an aggregate transaction value of more than $100 billion. The firm has offices in New York and London.