December 27, 2010, 12:41 PM

Jo-Ann is going private

Leonard Green & Partners will pay $1.6 billion for the fabric and craft goods retailer.

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A private equity firm will buy Jo-Ann Stores Inc. and take private the multichannel retailer of fabrics and craft goods. Leonard Green & Partners will pay $1.6 billion for the retailer, Jo-Ann Stores says.  The retailer, which sells online at Joann.com, expects the deal to close in the first half of 2011.

“Leonard Green & Partners views Jo-Ann as an attractive investment opportunity because of our solid business strategy, our strong results and our talented team members. They are confident in our team and in our ability to drive continued growth,” the company wrote in an e-mail sent to its distribution centers and published in a U.S. Securities & Exchange Commission filing.

Jo-Ann Stores, No. 263 on Internet Retailer’s Top 500 Guide, reported $28.6 million in online sales for the first nine months of 2010. Total sales tallied $1.46 billion for the same period.

Leonard Green & Partners is one of two private equity firms in the process of acquiring apparel retailer J. Crew, No. 50, in a deal valued at $3 billion. The private equity firm’s other retail investments include Sports Authority, David’s Bridal and Neiman Marcus.

Leonard Green offered $61 per share for Jo-Ann Stores, a 34% premium from Friday’s closing price for Jo-Ann shares, which trade on the New York Stock Exchange. The deal will go through if approved by holders of a majority of the shares in Jo-Ann Stores.

Jo-Ann Stores operates 756 bricks-and-mortar stores in 48 states.

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