Jarden Corp acquires Yankee Candle for $1.75 bn from Madison Dearborn
04 September 2013
US consumer products company Jarden Corp yesterday agreed to buy scented candle maker Yankee Candle Company Inc from private equity firm Madison Dearborn Partners for $1.75 billion in order to expand its product portfolio.
Jarden expects to fund the transaction with cash on hand, common equity and the balance through a mix of bank debt and bonds.
The deal comes two months after Chicago-based Madison Dearborn was looking at listing the largest scented candle company in the US after failing to find buyer willing to pay as much as $2 billion, since potential suitors were put off with its long-term debt of $846 million. (See: Madison Dearborn to list Yankee Candle after sale fizzles out)
Madison Dearborn had acquired Massachusetts-based Yankee Candle in 2006 for around $1.6 billion.
Yankee Candle was founded in 1969 by 17-year-old Mike Kittredge and has become the most-recognised name in the candle business in the US.
Too broke to buy his mother a present, Mike melted some crayons to make her a candle. A neighbour saw it and convinced Mike to sell the candle to her. With that small stake, he bought enough wax to make two candles - one for his mom's present, and another to sell. That was the birth of Yankee Candle.
Today, with over 150 fragrances, Yankee Candle offers the world's largest selection of candle and home fragrance scents. In addition to scented candles, it also provides a wide range of home fragrance products, car fresheners and candle accessories.
The company sells its products through over 500 company-owned retail stores across the US, and generated revenue of $844.2 million in 2012.
With a market cap of around $4.84 billion and annual sales of $6.7 billion, Jarden has a diverse portfolio of over 100 brands.
It operates in three primary business segments, outdoor solutions, consumer solutions and branded consumables.
Upon closing, Jarden would have pro forma net sales and adjusted EBITDA of approximately $7.7 billion and $1 billion, respectively, for the twelve 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.
Martin Franklin, Jarden's founder and executive chairman, said, ''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.''
He went on to add that Yankee Candle was the company's first significant acquisition since April 2010.
''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,'' said James Lillie, Jarden's CEO.