By Abigail Summerville
NEW YORK (Reuters) – Private equity firm Clayton, Dubilier & Rice (CD&R) is exploring options including a sale of American Greetings that could value the 118-year-old greeting card maker at about $1.5 billion, including debt, according to people familiar with the matter.
CD&R, which acquired a majority stake in American Greetings in 2018, is working with Bank of America and Centerview Partners on the sale process, which is expected to attract interest from other private equity firms, the people said, requesting anonymity because the discussions are confidential.
Founded in 1906, American Greetings could command a valuation equivalent to more than five times its 2024 earnings before interest, taxes, depreciation and amortization of about $288 million, the sources said.
The Weiss family, descendants of founder Jacob Sapirstein, took the cardmaker private in 2013. CD&R owns a 60% stake in the company, while the Weiss family owns the remainder.
CD&R, Bank of America and Centerview declined to comment. American Greetings did not respond to requests for comment.
The greeting card industry has struggled to stem the revenue decline due to the rapid growth of digital cards and the decline of brick-and-mortar retailers. This has forced card manufacturers to streamline their operations, cut costs and shift their focus to increasing online card sales.
According to market researchers IBIS World, U.S. demand for greeting cards has declined at an average annual rate of 5.7% over the five-year period from 2018 to 2023. Hallmark Cards is the market leader in the industry, followed by American Greetings, according to IBIS.
Cleveland, Ohio-based American Greetings still generates most of its revenue from paper greeting cards sold at retailers including Walmart (NYSE:WMT), Target and Kroger (NYSE:KMT). Over the years, it has expanded into gift packaging and party supplies, and it also operates a digital business called AG Interactive, which offers e-cards and holiday content.
Its greeting card brands include Papyrus, Recycled Paper Greetings, Paper Rebel and Carlton Cards.
New York-based CD&R invests in a variety of sectors, including consumer, healthcare, industrial and technology. Notable consumer investments include food manufacturer Shearer's, apparel company S&S Activewear and pet supply manufacturer PetSafe.
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