Michaels Store, Inc (Nasdaq: MIK) Flushed With IPO Funds Despite Same Day Launch As GoPro Inc (Nasdaq: GPRO)

Michaels, the largest crafts retailer in the United States, started trading its shares publicly for the first time this Friday.

The company’s shares have barely pulled ahead of their $17 per share starting price, the lower end of their expected $17 to $19 range. This poor performance in the stock market was attributed to the hype surrounding camera maker GoPro, who started trading its shares the same day.

Michaels, however, managed to raise $473 million in IPO after selling all 27.8 million shares on offer. The crafts retailer is now valued at up to $3.45 billion.

Michaels is the largest arts and crafts retailer in North America, and sells scrapbooking and paper supplies, apparel, framing accessories, home and ceremony décor, customized invitation cards, and offers courses in baking, beading, and jewelry making. It owns several private brands, including Recollections, Artists’ Loft, and Loops & Threads. The company competes against Hobby Lobby, Jo-Ann, and Wal-mart stores.

The retailer has over 1,200 stores and about $4.6 billion in sales in the 2013 fiscal year.

Michaels reported an increase of 9 percent to $4.57 billion in sales between 2011 and 2013. During that same period, net income of consumers rose by 55 percent to $243 million.

The company was made private by Bain Capital and Blackstone Group in 2006 for $6 billion. It filed for an IPO of $500 million in 2012. This was postponed when former Chief Executive John Menzer underwent a stroke and stepped down from his lead position.

In July 2013, the company underwent a massive reorganization into a holding company structure. As of then, Bain Capital and Blackstone Group currently own 93 percent of the company as Michal Holdings. If the underwriters do not utilize their options, two private equity firms will own 80 percent of the company after the IPO.

Additionally, Michaels was another company slammed by a security breach of customer data and payment cards. Approximately 400,000 cards were possibly affect by the breach. This occurred between June 26th, 2013 and February 27th, 2014, following similar security breach reports from major retailers such as Target.

As of May 2014, Michaels still has $3.7 billion in debt. The company plans to use the money from the shares offering to redeem $466 million of Holdco funds that were issued in July 2013.