Tuesday September 3rd, 2013 - 9:51AM
Today, Jarden Corp. announced that it had entered into a definitive purchase agreement to acquire Yankee Candle Investments, LLC from a fund managed by Madison Dearborn Partners, LLC, a private equity firm, for approximately $1.75 billion in cash. The transaction will extend Jarden's portfolio of consumer brands in niche, seasonal staple categories.
Jarden noted that the deal also would establish new cross-selling opportunities, broaden its global distribution platform and deepen the company’s talent bench. When it completes the transaction, Jarden will have pro forma net sales and adjusted EBITDA of approximately $7.7 billion and $1 billion, respectively, for the 12 months ended June 30, the company pointed out. Yankee Candle, as an addition to Jarden's Branded Consumables segment, will further balance the acquiring company’s portfolio, expanding the segment to 35% of combined sales. Jarden maintained that it is expects cash on hand, common equity and a mix of bank debt and bonds will fund the transaction.
Yankee Candle has a leading market position in its core categories, a loyal customer base and an experienced management team, characteristics that align with what Jarden asserted are its strategic preferences. Jarden added that Yankee Candle has delivered consistent organic growth that is in line with its overall top-line growth profile of 3% to 5%, as well as strong margins and solid cash flow.
Jarden pointed out that it expects the Yankee Candle transaction to add 10% to its adjusted earnings per share pre synergies.
"We are delighted to announce this acquisition, which is consistent with our more than 10-year track record of success in acquiring leading consumer brands synonymous with their niche categories,” said Martin Franklin, Jarden's founder and executive chairman. “The iconic Yankee Candle brand is a natural extension of our existing portfolio and of our Branded Consumables business segment. As a successful, well-managed and well-invested business, Yankee Candle is a solid platform for us to leverage our proven, time-tested and portable brand-building approach and to drive additional value through investments in brand equity, product development and innovation. As our first significant acquisition since April 2010, Yankee Candle embodies all of the characteristics of our market-leading brands, while offering a compelling financial and strategic value proposition."
James Lillie, Jarden's CEO, said, "Not only will this acquisition immediately enhance our financial performance and create exciting new revenue drivers, but also it will expand the deep bench of talent that we have developed over the years. Our complementary strengths and skill sets pave the way for new cross-selling opportunities, cross-brand collaboration, partnerships and cross-business support, accelerating revenue growth across our global platform and driving long-term shareholder value. Jarden's global presence, capabilities and scale will facilitate Yankee Candle's expansion into new markets and geographies to further drive top-line growth and profitability. At the same time, Yankee Candle's gross profit and EBITDA margins will enhance Jarden's overall margins. Potential future cost and distribution synergies will help support investments and drive bottom-line improvements across the Jarden platform."
Jarden said it anticipates closing the Yankee Candle transaction in the fourth quarter, subject to customary closing conditions and regulatory approvals.