SYS-CON MEDIA Authors: Craig Panigiris, Carmen Gonzalez, Sean Houghton, Glenn Rossman, Ignacio M. Llorente

News Feed Item

Jarden Announces Agreement To Acquire Yankee Candle For $1.75 Billion

- Transaction will be accretive to adjusted earnings per share, pre-synergies

RYE, N.Y., Sept. 3, 2013 /PRNewswire/ -- Jarden Corporation ("Jarden" or the "Company") (NYSE: JAH), a leading global consumer products company, announced today that it has entered into a definitive purchase agreement to acquire Yankee Candle Investments LLC ("Yankee Candle"), a leading specialty-branded premium scented candle company in the United States, from a fund managed by Madison Dearborn Partners, LLC, a private equity firm, for approximately $1.75 billion in cash, subject to working capital and other adjustments.

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% 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%-5%, 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% and 13.2%, respectively, compared to 28.9% and 11.8%, respectively, on a standalone basis. The transaction is expected to be accretive to Jarden's adjusted earnings per share by approximately 10%, 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.

Please see the schedule accompanying this release for a reconciliation of non-GAAP adjusted gross profit, adjusted gross profit margin, adjusted EBITDA, and adjusted EBITDA margin to the comparable GAAP measures.

Conference Call Information

Jarden will be hosting a conference call at 8:30 a.m. Eastern Time on September 3, 2013 to discuss the transaction. The listen-only mode of the call can be accessed by dialing 1-888-708-5692 (or 1-913-312-1443 for international callers) and entering the following pass code: 1817117. The call will also be webcast simultaneously through the Company's website, www.jarden.com, and will be archived approximately one hour after completion of the call. Additionally, a telephonic re-play of the call will be available at 11:30 a.m. Eastern Time on September 3, 2013 until 11:59 p.m. Eastern Time on September 10, 2013 and can be accessed by dialing 1-877-870-5176.

A slide presentation will be available at www.jarden.com.

Safe Harbor

This news release contains "forward-looking statements" within the meaning of the federal securities laws and is intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995, including statements regarding the impact of the Yankee Candle acquisition on the Company's business and financial results including sales, segment net sales, adjusted EBITDA, adjusted gross profit, accretive to earnings, adjusted EPS, overall margin profiles, adjusted gross margin, adjusted EBITDA margin and cash flows, the ability of the Company  to close the Yankee Candle acquisition, the ability of the Company to raise the funds needed to close the Yankee Candle acquisition and the expected plan to fund the Yankee Candle acquisition, the Company's earnings per share and adjusted diluted earnings per share, expected or estimated revenue, segment earnings, net interest expense, income tax provision, cash flow from operations, and reorganization and other non-cash charges, the outlook for the Company's markets and the demand for its products, consistent profitable growth, free cash flow, future revenues and gross, operating and EBITDA margin improvement requirement and expansion, organic net sales growth, bank leverage ratio, the success of new product introductions, growth in costs and expenses, the impact of commodities, currencies and transportation costs and the Company's ability to manage its risk in these areas, repurchase of shares of common stock from time to time under the Company's stock repurchase program, our ability to raise new debt, and the impact of acquisitions, divestitures, restructurings, and other unusual items, including the Company's ability to successfully integrate and obtain the anticipated results and synergies from its consummated acquisitions. These projections and statements are based on management's estimates and assumptions with respect to future events and financial performance and are believed to be reasonable, though are inherently uncertain and difficult to predict. Actual results could differ materially from those projected as a result of certain factors. A discussion of factors that could cause results to vary is included in the Company's periodic and other reports filed with the Securities and Exchange Commission.

About Yankee Candle

Yankee Candle is a leading designer, manufacturer, wholesaler and retailer of premium scented candles, based on sales. Yankee Candle participates in the $25 billion global candle and home fragrance market. Yankee Candle has a 43-year history of offering distinctive products and marketing them as affordable luxuries and consumable gifts. Yankee Candle sells its products through a North American wholesale customer network of approximately 35,000 store locations, a growing base of Yankee Candle owned and operated retail stores, direct mail catalogs, and its Internet website (www.yankeecandle.com). Outside of North America, Yankee Candle sells its products primarily through an international wholesale customer network of over 6,000 store locations and distributors covering over 50 countries on a combined basis.

About Jarden Corporation

Jarden Corporation is a leading provider of a diverse range of consumer products with a portfolio of over 120 trusted, quality 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®. Headquartered in Rye, N.Y., Jarden ranks #383 on the Fortune 500 and has over 25,000 employees worldwide. For further information about Jarden, please visit www.jarden.com.

Note: This release contains non-GAAP financial measures that may not be directly comparable to other similarly titled measures used by other companies. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a company's historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statements of operations, balance sheets, or statements of cash flows of the Company; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. Pursuant to the requirements of Regulation G, the Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures. These non-GAAP measures are provided because management of the Company uses these financial measures in monitoring and evaluating the Company's ongoing financial results and trends. Management uses this non-GAAP information as an indicator of business performance, and evaluates overall management with respect to such indicators. Additionally, the Company uses non-GAAP financial measures because the Company's credit agreement provides for certain adjustments in calculations used for determining whether the Company is in compliance with certain credit agreement covenants, including, but not limited to, adjustments relating to non-cash purchase accounting adjustments, non-cash impairment charges of goodwill, intangibles and other assets, certain net reorganization costs and acquisition-related and other charges, transaction and integration costs, Venezuela hyperinflationary and devaluation-related charges, gains and losses as a result of currency fluctuations, gain on the sale of a domestic business, non-cash stock-based compensation costs, loss on early extinguishment of debt, non-cash original issue discount amortization and other items. Adjusted gross margin is calculated by dividing adjusted gross profit by net sales. Segment earnings (as adjusted EBITDA) margin is calculated by dividing segment earnings (as adjusted EBITDA) by net sales. These non-GAAP measures should be considered in addition to, but not as a substitute for, measures of financial performance prepared in accordance with GAAP.

Schedule to Release

Supplemental Pro Forma Financial Information (unaudited)







($ in millions)






Jarden
12 Months
Ended
6/30/2013

Yankee Candle
52 Weeks
Ended
6/29/2013

Pro Forma
12 Months
Ended
6/30/2013

Net sales


$      6,865

$              863

$      7,728

Adjusted gross profit


$      1,985

$              494

$      2,479

% Margin


28.9%

57.2%

32.1%

Adjusted EBITDA (Segment Earnings)


$        813

$              205

$      1,018

% Margin


11.8%

23.8%

13.2%

 


Supplemental Combined Financial Information (unaudited)








($ in millions)










Jarden
12 Months
Ended

6/30/2013

Yankee Candle
52 Weeks
Ended
6/29/2013

Combined
12 Months
Ended
6/30/2013

Cash flow from operations




$        436

$                82

$         518

 

Jarden Supplemental Financial Information (unaudited)





($ in millions)



Six Months Ended




6/30/2013

6/30/2012

Inc/(Dec) %

Net sales



$    3,340

$    3,171

5.3 %

Adjusted gross profit



$       962

$       916

5.0 %

% Margin



28.8%

28.9%


Adjusted EBITDA (Segment Earnings)



$       348

$       349

(0.4%)

% Margin



10.4%

11.0%


Cash flow from operations



$        (41 )

$           3

            NM

 

Jarden Corporation
Reconciliation of GAAP to Non-GAAP




Jarden Latest Twelve Months ("LTM") Segment Earnings Reconciliation (unaudited)








($ in millions)



Year Ended

Six Months Ended

LTM Ended




12/31/2012

6/30/2013

6/30/2012

6/30/2013

Reconciliation of Non-GAAP measure:







Net income



$          244

$         72

$       118

$          198

Income tax provision



148

42

70

120

Interest expense, net



185

96

90

191

Loss on early extinguishment of debt



26

26








Operating Earnings



$          577

$       236

$       278

$          535








Adjustments to reconcile to Segment Earnings







Depreciation and amortization



$          153

$         76

$         71

$          158

Fair market value adjustments to inventory



6

5

11

Reorganization costs, net



27

2

29

Acquisition-related and other costs, net



17

17

Venezuela devaluation-related charges



29

29

Cumulative adjustment of stock compensation



34

34








Segment Earnings



$          814

$       348

$       349

$          813

 

Jarden LTM Gross Profit Reconciliation (unaudited)







($ in millions)


Year Ended

Six Months Ended

LTM Ended
6/30/2013



12/31/2012

6/30/2013

6/30/2012

Reconciliation of Non-GAAP measure:






Net sales


$       6,696

$    3,340

$    3,171

$        6,865

Cost of sales


4,772

2,383

2,255

4,900







Gross profit


$       1,924

$       957

$       916

$        1,965







Adjustments to reconcile to Adjusted Gross Profit






Fair market value adjustments to inventory


6

5

11

Accelerated depreciation related to international platform rationalization


9

9







Adjusted Gross Profit


$       1,939

$       962

$       916

$        1,985

 

Yankee Candle Segment Earnings Reconciliation (unaudited)







($ in millions)


52 Weeks Ended

26 Weeks Ended

52 Weeks Ended



12/29/2012

6/29/2013

6/30/2012

6/29/2013

Reconciliation of Non-GAAP measure:






Net income (loss)


$                 33

$        (18 )

$        (28 )

$                 43

Provision of income taxes


22

(9 )

(16 )

29







Income (loss) from continuing operations before provision
for income taxes


$                 55

$        (27 )

$        (44 )

$                 72







Adjustments to reconcile to Income from continuing
operations before provision for income taxes






Interest expense


$               107

$         49

$         53

$               103

Depreciation and amortization


35

17

18

34

Amortization included in interest expense


(7 )

(4 )

(3 )

(8 )

Realized gain on derivative contracts


(8 )

(2 )

(4 )

(6 )







EBITDA from Continuing Operations


$               182

$         33

$         20

$               195







Loss on early extinguishment of debt


13

13

Restructuring costs


2

1

1

2

Non-recurring advisory fee


1

1

1

1

Realized losses on foreign currency


1

1

Non-cash equity based compensation


1

1

Other one-time charges


1

1

1

1

Estimated impact of certain non-recurring events


5

1

1

5







Segment Earnings


$               206

$         37

$         38

$               205

 

Yankee Candle Gross Profit Reconciliation (unaudited)








($ in millions)



52 Weeks Ended

26 Weeks Ended

52 Weeks Ended




12/29/2012

6/29/2013

6/30/2012

6/29/2013

Reconciliation of Non-GAAP measure:







Net sales



$               844

$       319

$       300

$               863

Cost of sales



364

145

135

374








Gross profit



$               480

$       174

$       165

$               489








Adjustments to reconcile to Adjusted Gross Profit







Estimated impact of certain non-recurring events



5

1

1

5








Adjusted Gross Profit



$               485

$       175

$       166

$               494

 

Pro Forma Combined Adjusted EBITDA Reconciliation (unaudited)





($ in millions)



LTM Ended
6/30/2013
Pro Forma

Reconciliation of Non-GAAP measure:




Net income



$            273

Provision of income taxes



168





Income from continuing operations before provisionfor income taxes



$            441





Interest expense



$            227

Realized gain on derivative contracts



(6 )

Loss on early extinguishment of debt



26





EBIT



$            688





Depreciation and amortization



$            208

Amortization included in interest expense



(8 )





EBITDA from Continuing Operations



$            888





Fair market value adjustments to inventory



11

Reorganization costs, net



29

Acquisition-related and other costs, net



17

Venezuela devaluation-related charges



29

Cumulative adjustment of stock compensation



35

Restructuring costs, net



2

Non-recurring advisory fee



1

Other one-time charges



1

Estimated impact of certain non-recurring events



5





Segment Earnings



$         1,018

 

SOURCE Jarden Corporation

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
SYS-CON Media announced today that Skytap blog on "DevOps Journal" exceeded 84,000 story reads. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. DevOps Journal brings valuable information to DevOps professionals who are transforming the way enterprise IT is done. Noel Wurst is the managing content editor at Skytap. Skytap provides SaaS-based dev/test environments to the enterprise. Skytap solution removes the inefficiencies and constraints that comp...
ScriptRock makes GuardRail, a DevOps-ready platform for configuration monitoring. Realizing we were spending way too much time digging up, cataloguing, and tracking machine configurations, we began writing our own scripts and tools to handle what is normally an enormous chore. Then we took the concept a step further, giving it a beautiful interface and making it simple enough for our bosses to understand. We named it GuardRail after its function - to allow businesses to move fast and stay sa...
SYS-CON Events announced today Isomorphic Software, the global leader in high-end, web-based business applications, will exhibit at SYS-CON's DevOps Summit 2015 New York, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Isomorphic Software is the global leader in high-end, web-based business applications. We develop, market, and support the SmartClient & Smart GWT HTML5/Ajax platform, combining the productivity and performance of traditional desktop software ...
SYS-CON Media announced today that Sematext launched a popular blog feed on DevOps Journal with over 6,000 story reads over the weekend. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. DevOps Journal brings valuable information to DevOps professionals who are transforming the way enterprise IT is done. Sematext is a globally distributed organization that builds innovative Cloud and On Premises solutions for performance monitoring, alerting an...
SYS-CON Events announced today that Cloudian, Inc., the leading provider of hybrid cloud storage solutions, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Cloudian, Inc., is a Foster City, California - based software company specializing in cloud storage software. The main product is Cloudian, an Amazon S3-compliant cloud object storage platform, the bedrock of cloud computing systems, that enables c...
Leysin American School is an exclusive, private boarding school located in Leysin, Switzerland. Leysin selected an OpenStack-powered, private cloud as a service to manage multiple applications and provide development environments for students across the institution. Seeking to meet rigid data sovereignty and data integrity requirements while offering flexible, on-demand cloud resources to users, Leysin identified OpenStack as the clear choice to round out the school's cloud strategy. Additional...
SYS-CON Events announced today that Windstream, a leading provider of advanced network and cloud communications, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Windstream (Nasdaq: WIN), a FORTUNE 500 and S&P 500 company, is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, p...
The BPM world is going through some evolution or changes where traditional business process management solutions really have nowhere to go in terms of development of the road map. In this demo at 15th Cloud Expo, Kyle Hansen, Director of Professional Services at AgilePoint, shows AgilePoint’s unique approach to dealing with this market circumstance by developing a rapid application composition or development framework.
In high-production environments where release cycles are measured in hours or minutes — not days or weeks — there's little room for mistakes and no room for confusion. Everyone has to understand what's happening, in real time, and have the means to do whatever is necessary to keep applications up and running optimally. DevOps is a high-stakes world, but done well, it delivers the agility and performance to significantly impact business competitiveness.
"Our premise is Docker is not enough. That's not a bad thing - we actually love Docker. At ActiveState all our products are based on open source technology and Docker is an up-and-coming piece of open source technology," explained Bart Copeland, President & CEO of ActiveState Software, in this SYS-CON.tv interview at DevOps Summit at Cloud Expo®, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, discussed the underlying factors that are driving the economics of intelligent systems. Discover ...
"BSQUARE is in the business of selling software solutions for smart connected devices. It's obvious that IoT has moved from being a technology to being a fundamental part of business, and in the last 18 months people have said let's figure out how to do it and let's put some focus on it, " explained Dave Wagstaff, VP & Chief Architect, at BSQUARE Corporation, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com...
Verizon Enterprise Solutions is simplifying the cloud-purchasing experience for its clients, with the launch of Verizon Cloud Marketplace, a key foundational component of the company's robust ecosystem of enterprise-class technologies. The online storefront will initially feature pre-built cloud-based services from AppDynamics, Hitachi Data Systems, Juniper Networks, PfSense and Tervela. Available globally to enterprises using Verizon Cloud, Verizon Cloud Marketplace provides a one-stop shop fo...
SYS-CON Events announced today that IDenticard will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. IDenticard™ is the security division of Brady Corp (NYSE: BRC), a $1.5 billion manufacturer of identification products. We have small-company values with the strength and stability of a major corporation. IDenticard offers local sales, support and service to our customers across the United States and Canada...