Jarden Corporation is to acquire Yankee Candle Investments from a fund managed by private equity fund Madison Dearborn Partners for approximately USD1.75bn in cash.
The transaction will extend Jarden’s portfolio of consumer brands in niche, seasonal staple categories, while creating opportunities in cross-selling, broadening the global distribution platform, and deepening Jarden’s talent bench.
Upon closing the transaction, Jarden would have pro forma net sales and adjusted EBITDA of approximately USD7.7bn and USD1.0bn, respectively, for the 12 months ended 30 June 2013. As an addition to Jarden’s branded consumables segment, Yankee Candle will further balance Jarden’s portfolio, expanding this segment to approximately 35 per cent of combined sales.
The transaction is expected to be funded with cash on hand, common equity and the balance through a mix of bank debt and bonds.
Yankee Candle has many of the same attractive business characteristics as Jarden, including a leading market position in its core categories, a loyal customer base and an experienced management team. Yankee Candle has delivered consistent organic growth that is in line with Jarden’s overall top-line growth profile of three to five per cent per cent, as well as strong margins and solid cash flow.
The transaction is expected to be accretive to Jarden’s adjusted earnings per share by approximately 10 per cent, pre synergies.
Martin E Franklin, Jarden’s founder and executive chairman, says: "We are delighted to announce this acquisition, which is consistent with our more than ten-year track record of success in acquiring leading consumer brands synonymous with their niche categories. 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."
Harlan M Kent, Yankee Candle’s president and chief executive officer, says: "This is a transformative milestone for Yankee Candle. Over the past 40 years, we have built a truly iconic brand with a deeply loyal customer base. Jarden is well known as a stable, long-term owner of businesses, and this will provide us with a perfect platform on which to grow. This acquisition provides us with the resources and scale necessary to drive our future success and will further strengthen our existing product development and distribution capabilities. Jarden’s similar niche consumer strategy and complementary consumer portfolio will help to accelerate our expansion. I’d like to thank all of Yankee Candle’s employees for their ongoing dedication to the business and hope they share in my excitement as we look forward to the next stage of our growth as part of the Jarden family."
The transaction, which is expected to close early in the fourth quarter of 2013, is subject to customary closing conditions and regulatory approvals.
