Factory Card & Party sold to AAH Holdings

Shoppers will still be able to find their Halloween costumes and greeting cards at Factory Card & Party Outlet despite Tuesday's announcement the company was acquired.

The acquisition of the Naperville-based company by AAH Holdings Corp. is not expected to change things for Factory Card's 184 retail stores, about 40 in the Chicago area market.

AAH Holdings of Elmsford, N.Y., acquired the party giant for $16.50 per share, a more than 100 percent premium on Monday's closing price of $8.05. The $72 million acquisition will assume the debt of Factory Card, which entered Chapter 11 bankruptcy protection in 1999. The company emerged following a financial restructuring in 2002.

Factory Card will continue to operate as a separate company within AAH Holdings.

"We see this as a win-win for our shareholders, associates and customers," said Gary Rada, president and chief executive officer of Factory Card & Party Outlet for the past decade.

"We're pleased that we can stand on our own and operate on our own. Yet, we'll have the resources of a large corporation, giving us the ability to grow through the years," said Rada, 53, during a phone interview Tuesday.

The boards of both companies have approved the transaction. Founded in 1989, Factory Card & Party Outlet sells party supply merchandise, including greeting cards, gift wrap, ribbon, party supplies, balloons and novelty and celebratory items.

Rada, a resident of Naperville, and his leadership team will continue to oversee the company's 2,700 employees, including 270 people at Naperville's distribution center and main office.

AAH Holdings Corporation, owned by Berkshire Partners, Weston Presidio and AAH management, designs, manufactures, and distributes party goods, including paper and plastic tableware, metallic balloons, accessories, novelties, gifts and stationery. AAH's retail division operates more than 428 company-owned stores and has about 330 franchise stores in the U.S.

After giving effect to the acquisition, AAH's operating units will have annual sales of about $1.4 billion. Including the sales of franchisee-owned stores, total network sales will be about $2 billion. AAH also operates a division of temporary Halloween stores operating as Halloween USA.