Consumer products company Jarden (NYSE: JAH ) announced today it would be acquiring Yankee Candle, a scented-candle company, from private equity firm Madison Dearborn Partners for approximately $1.75 billion.
There could be up to $55 million in additional cash payments contingent on performance goals. Jarden says the transaction will be funded with cash, common equity, bonds, and bank debt.
Jarden consists of a portfolio of more than 120 brands including outdoor products companies Coleman and Marmot as well as kitchen staples Crock-Pot and Mr. Coffee. Yankee Candle will be included among the Branded Consumables segment which, after the acquisition, will represent approximately 35% of Jarden's revenue, the company said.
According to Jarden, the addition of Yankee candle will give Jarden pro forma net sales of $7.7 billion (up from $6.8 billion) and earnings before interest, taxes, depreciation and amortization (EBITDA) of $1 billion. In addition, the gross profit margin of Jarden will move from 11.8% to a pro forma 13.2% following the acquisition, the company said.
Jarden Chief Executive Officer James Lillie highlighted the mutual benefits of the acquisition and was quoted in the company press release as saying that "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."
Yankee Candle notes it has a "43-year history of offering distinctive products and marketing them as affordable luxuries and consumable gifts." It sales network includes 35,000 store locations in North America and more than 6,000 in 50 other countries outside North America, as well as direct mail catalogs, and a website.
Harlan Kent, President and CEO of Yankee Candle, was quoted as saying "This is an exciting opportunity for Yankee Candle to join a company that shares our passion for brand building, product quality, and customer service."
The transaction is expected to close in the fourth quarter of this year, and Bank of America Merrill Lynch and Barclays acted as the financial advisors and Kirkland & Ellis LLP acted as counsel.