Leonard Green & Partners LP has signed a definitive agreement to acquire fabric and craft retailer Jo-Ann Stores for $1.6 billion.

The Hudson, Ohio retailer on Thursday said that Leonard Green, a West Los Angeles private equity firm with a portfolio that includes Container Store and Neiman Marcus, plans to pay shareholders $61 a share, a 34 percent premium over the stock’s closing price on Wednesday.

The private equity firm is acquiring a growing specialty retailer that has seen shares hit all-time highs several times in recent months. Though hurt during the recession, the company, which competes with Michaels Stores Inc. and Hancock Fabrics Inc., reported a 21 jump in third-quarter net income. It has raised earnings guidance and said it would speed up plans to open new stores, adding to the 756 it now operates.

If the acquisition is approved by the shareholders and regulators, the sale is expected to close in the first half of next year. As part of the agreement, Jo-Ann Stores’ board of directors will solicit alternative proposals through Feb. 14.

“Jo-Ann Stores is a clear leader in the fabric and craft retail industry,” said Todd Purdy, a Leonard Green principal, in a statement. “We are excited to partner with Jo-Ann Stores’ talented management team and look forward to the next phase of the company’s growth.”

Leonard Green in November partnered with another private equity firm, TPG Capital, to make a $3 billion offer for New York City apparel retailer J. Crew Group Inc. That deal has come under scrutiny over allegations that Leonard Green and TPG were given preferential treatment over other potential suitors.

While known for its retail holdings, Leonard Green earlier this month closed a $205 million deal to take West Los Angeles hospital owner Prospect Medical Holdings Inc. private in a management buyout.