US consumer goods firm Jarden Corp to acquire Waddington Group: reports
13 July 2015
US consumer goods major Jarden Corp is closing in on Waddington Group in a $1.35-bn deal, according to media reports.
According reports citing informed sources, Jarden had agreed on terms with Olympus Partners, the private equity owner of Waddington, maker of disposable cups, plates and plastic utensils. In reaching the deal, Jarden outbid the rest in the last few days.
A deal might be announced as early as Monday or Tuesday.
Waddington had annual earnings before interest, tax, depreciation and amortisation stood at over $140 million, Reuters reported previously.
Waddington's products are used by food service caterers, restaurants and supermarkets in the US, Canada and Europe.
Acquiring Waddington in 2012 from investment firm Seven Mile Capital Partners for an undisclosed sum, Olympus grew the company through acquisitions, including that of plastic container packaging company Par-Pak Ltd in 2013.
Jarden Corp, a consumer-goods company with products ranging from K2 skis to Yankee Candle, would add disposable cups, plates and plastic utensils to its range.
Jarden would finance the deal through a combination of cash, common equity, and a mix of bank debt and bonds, with the transaction expected to close in the third quarter.
''Jarden's global presence, capabilities and scale will help Waddington's expansion into new markets,'' Jarden CEO James Lillie said in the statement.
Shares of Jarden rose 9.3 per cent this year, outpacing the 1.3 per cent gain in the Russell 1000 Index.
P:ost acquisition, Waddington would contribute about $800 million to 2016 revenue, according to Jarden.
The business had grown by 3 per cent to 5 per cent annually, in line with Jarden's growth rate, according to the statement.
The deal would increase Jarden's adjusted earnings per share slightly in 2015 and by about 5 per cent in 2016.
Jarden had sales of $8.29 billion in 2014, up 13 per cent from a year earlier, however, according to analysts, its growth would stall this year, putting pressure on the company to expand into new markets.
Jarden's founder and chairman, Martin Franklin, is known to be an aggressive dealmaker, having built Jarden into a company valued at $10.1 billion, mostly through acquisitions.