Jarden Agrees to Buy Yankee Candle for $1.75 Billion in Cash

Jarden Corp. (JAH) agreed to buy Yankee Candle for $1.75 billion, making its biggest acquisition to add the 43-year-old scented candle maker to its collection of more than 120 consumer brands.

Jarden will use cash to acquire the largest U.S. scented candle company from a fund managed by private-equity firm Madison Dearborn Partners LLC, according to a statement today. The transaction is projected to boost Jarden’s adjusted earnings per share by about 10 percent and the company expects the deal to be completed in the fourth quarter.

The purchase may help Jarden, whose products range from Mr. Coffee machines to Health o meter scales, revive sales growth that last year slowed to 0.2 percent after increasing 11 percent in 2011. Madison Dearborn bought Yankee Candle, which sells items in more than 35,000 retail stores in North America, for about $1.4 billion in 2007.

“We see significant opportunity to help accelerate the growth of Yankee Candle in North America and around the world,” Jarden Chief Executive Officer James E. Lillie said during a conference call today. While most of the company’s international sales are from Ireland and the U.K., Jarden can expand the brand to other European countries where it already sells products, he said.

Photographer: Scott Eisen/Bloomberg

Candles cool at a Yankee Candle Co. factory in Whately, Massachusetts. Close

Candles cool at a Yankee Candle Co. factory in Whately, Massachusetts.

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Photographer: Scott Eisen/Bloomberg

Candles cool at a Yankee Candle Co. factory in Whately, Massachusetts.

Yankee Candle generates less than 15 percent of sales outside the U.S., according to slides posted on Jarden’s website today.

Shares Surge

Shares of Rye, New York-based Jarden rose 10 percent to $47.43 at the close in New York for the biggest gain since Oct. 29, 2009. Jarden has advanced 38 percent this year, compared with a 15 percent gain for the Standard & Poor’s 500 Index.

“This was an opportunistic buy,” Jarden co-counder and Chairman Martin Franklin said in a telephone interview. While the company has no other specific acquisition targets now, “we’re looking at things all the time,” he said.

Sales at Yankee Candle rose 7.4 percent to $844.2 million last year as the company added stores to its distribution and selling network, according to a filing. Along with candles, South Deerfield, Massachusetts-based Yankee Candle makes potpourri and home decor.

Madison Dearborn and Yankee Candle shareholders will reap about $550 million in the sale to Jarden. Yankee Candle’s buyout was funded with $433.1 million in equity, of which Chicago-based Madison Dearborn put in about $429 million, according to regulatory filings. In 2011, the company raised debt to pay Madison Dearborn and other investors a $300.8 million dividend.

A termination fee of $62.5 million applies if Jarden walks away.

To contact the reporters on this story: James Callan in New York at jcallan2@bloomberg.net; Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editor responsible for this story: Cecile Daurat at cdaurat@bloomberg.net

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