Jo-Ann Stores Inc. will spend about $23 million to acquire all of the outstanding shares of IdeaForest.com Inc., which operates JoAnn.com.
In a new regulatory filing with the Securities and Exchange Commission, Jo-Ann has agreed to pay approximately $12.3 million when the deal closes in November and delayed payments totaling approximately $8.6 million over the next three years for the 62% of IdeaForest that the retailer does not currently own. In addition, Jo-Ann will pay approximately $2.4 million in incentive bonuses to current and former IdeaForest employees as outlined in the merger agreement.
When the deal is complete, Jo-Ann, No. 208 in the Internet Retailer Top 500 Guide, will operate IdeaForest as a wholly owned subsidiary. Jo-Ann announced plans to acquire the remaining shares of IdeaForest in August as part of a broader move to use the web to expedite multi-channel retailing. "By more closely integrating the online business with our brick and mortar stores, we will not only improve customer satisfaction, but also deliver earnings accretion for shareholders,” says Jo-Ann CEO Darrell Webb.
JoAnn.com attracts an average of 2 million unique visitors per month, the company says. It offers 65,000 products including fabric, sewing and quilting items, scrapbooking supplies, and home décor goods. IdeaForest began operating JoAnn.com in 2000.
JoAnn.com’s vice president Patrick Duncan will speak at the Internet Retailer Web Design ’08 Conference, Jan. 30-Feb. 1 in Miami, in a session titled Overcoming obstacles to navigation: The most common obstacles and how to get rid of them.
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