Jarden Corporation to Buy Yankee Candle

Jarden Corporation, the parent of Abu Garcia, Berkley, Coleman, ExOfficio and other sports and outdoor brands, entered into a definitive purchase agreement to acquire Yankee Candle, a leading specialty-branded premium scented candle company in the U.S. The purchase price was for approximately $1.75 billion in cash.

The business was acquired from Madison Dearborn Partners, LLC, a private equity firm.

The transaction will extend Jarden’s portfolio of market-leading, 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 $7.7 billion and $1.0 billion, respectively, for the twelve months ended June 30, 2013. As an addition to Jarden’s Branded Consumables segment, Yankee Candle will further balance Jarden’s portfolio, expanding this segment to approximately 35 percent 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 3 percent – 5 percent, as well as strong margins and solid cash flow. Its seasonal staple characteristics have enabled Yankee Candle to demonstrate a proven resilience through economic cycles.

The transaction is perfectly aligned with Jarden’s disciplined acquisition criteria, and it will enhance the Company’s overall margin profile. Pro forma for the transaction, Jarden’s adjusted gross profit and adjusted EBITDA margins for the twelve months ended June 30, 2013 would have been 32.1 percent and 13.2 percent, respectively, compared to 28.9 percent and 11.8 percent, respectively, on a standalone basis. The transaction is expected to be accretive to Jarden’s adjusted earnings per share by approximately 10 percent, pre synergies. Additionally, Yankee Candle’s strong cash flow generative characteristics are consistent with the balance of Jarden’s portfolio. We anticipate that the combination will achieve our target leverage ratio within the first year of ownership.

Martin E. Franklin, Jarden’s Founder and Executive Chairman, commented, “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.”

James E. Lillie, Jarden’s Chief Executive Officer, added, “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 skillsets 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.”

Harlan M. Kent, Yankee Candle’s President and Chief Executive Officer, added, “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.

Jarden Corporation owns over 120 brands sold globally. Jarden operates in three primary business segments through a number of well recognized brands, including: Outdoor Solutions: Abu Garcia, Aero, Berkley, Campingaz and Coleman, ExOfficio, Fenwick, Gulp!, Invicta, K2, Marker, Marmot, Mitchell, Penn, Rawlings, Shakespeare, Stearns, Stren, Trilene, Volkl and Zoot; Consumer Solutions: Bionaire, Breville, Crock-Pot, FoodSaver, Health o meter, Holmes, Mr. Coffee, Oster, Patton, Rival, Seal-a-Meal, Sunbeam, VillaWare and White Mountain; and Branded Consumables: Ball, Bee, Bernardin, Bicycle, Billy Boy, Crawford, Diamond, Dicon, Fiona, First Alert, First Essentials, Hoyle, Kerr, Lehigh, Lifoam, Lillo, Loew Cornell, Mapa, NUK, Pine Mountain, Quickie, Spontex and Tigex.