Jarden to Acquire Waddington Group for $1.35 Billion
Jarden Corporation, a global consumer products company, announces that it will acquire Waddington Group, Inc., a leading manufacturer and marketer of disposable tableware for commercial, foodservice and retail markets, for approximately $1.35 billion. The company will acquire Waddington from an investment fund managed by Olympus Partners, a private equity firm, and other stockholders.
The transaction provides a meaningful addition to Jarden's portfolio while creating opportunities in cross-selling, broadening the distribution platform particularly in the B2B category, and deepening Jarden's talent bench. Waddington, which is expected to contribute approximately $800 million to 2016 revenues, will be reported as part of Jarden's Branded Consumables segment. The transaction is expected to be funded through a combination of cash on hand, common equity and a mix of bank debt and bonds.
The Waddington Group has many of the same attractive business characteristics as Jarden, including leading market positions in its core categories, products that generate recurring revenue and an experienced management team. Waddington has delivered consistent organic growth that is in line with Jarden's overall top-line organic growth profile of 3%-5%, as well as strong operating margins and solid cash flow. Its defensible moats around the business have enabled Waddington to demonstrate a proven resilience through economic cycles.
The transaction is aligned with Jarden's disciplined acquisition criteria and it will enhance the Company's cash flow profile. It is anticipated that there will be meaningful revenue synergies that should start in 2016 and grow over time. The transaction is expected to be immediately accretive to Jarden's adjusted earnings per share in a small way in 2015 and by approximately 5% in 2016.
Martin E. Franklin, Jarden's Founder and Executive Chairman, commented, "We are delighted to announce this acquisition, which is consistent with our fourteen-year track record of success in acquiring businesses with category-leading positions in niche markets. As a fast-growing, well-managed business, Waddington offers a solid platform for us to leverage our proven, time-tested approach to driving organic growth and creating additional value through continued investments in product development and innovation. Waddington's entrepreneurial growth culture is a strong cultural fit with Jarden, while offering a compelling financial and strategic value proposition."
James E. Lillie, Jarden's Chief Executive Officer, added, "This acquisition should immediately enhance our financial performance and create exciting new revenue drivers. Our complementary businesses—further enhanced by our combined deep bench of management talent—lay the foundation for new cross-selling opportunities, cross-brand collaboration, and cross-business support. These initiatives should accelerate revenue growth across our global platform and help drive long-term shareholder value. Jarden's global presence, capabilities and scale will help Waddington's expansion into new markets and geographies to further drive top-line growth and profitability. At the same time, Waddington should enhance and accelerate Jarden's growth in the B2B market. Potential future cost and distribution synergies will help support investments and drive bottom-line improvements across the Jarden platform."
Mike Evans, Waddington Group's President and Chief Executive Officer, added, "This is a significant milestone for Waddington. Jarden is well known as a stable, long-term owner of businesses, and this will provide us with a strong platform upon which to continue to expand. This acquisition provides us with the resources and scale necessary to further strengthen our existing product innovation and distribution capabilities to drive top- and bottom-line growth. I am confident that Waddington's employees share in my excitement as we look forward to becoming part of the Jarden family."
The transaction, which is expected to close in the third quarter of 2015, is subject to customary closing conditions and regulatory approvals.
The transaction provides a meaningful addition to Jarden's portfolio while creating opportunities in cross-selling, broadening the distribution platform particularly in the B2B category, and deepening Jarden's talent bench. Waddington, which is expected to contribute approximately $800 million to 2016 revenues, will be reported as part of Jarden's Branded Consumables segment. The transaction is expected to be funded through a combination of cash on hand, common equity and a mix of bank debt and bonds.
The Waddington Group has many of the same attractive business characteristics as Jarden, including leading market positions in its core categories, products that generate recurring revenue and an experienced management team. Waddington has delivered consistent organic growth that is in line with Jarden's overall top-line organic growth profile of 3%-5%, as well as strong operating margins and solid cash flow. Its defensible moats around the business have enabled Waddington to demonstrate a proven resilience through economic cycles.
The transaction is aligned with Jarden's disciplined acquisition criteria and it will enhance the Company's cash flow profile. It is anticipated that there will be meaningful revenue synergies that should start in 2016 and grow over time. The transaction is expected to be immediately accretive to Jarden's adjusted earnings per share in a small way in 2015 and by approximately 5% in 2016.
Martin E. Franklin, Jarden's Founder and Executive Chairman, commented, "We are delighted to announce this acquisition, which is consistent with our fourteen-year track record of success in acquiring businesses with category-leading positions in niche markets. As a fast-growing, well-managed business, Waddington offers a solid platform for us to leverage our proven, time-tested approach to driving organic growth and creating additional value through continued investments in product development and innovation. Waddington's entrepreneurial growth culture is a strong cultural fit with Jarden, while offering a compelling financial and strategic value proposition."
James E. Lillie, Jarden's Chief Executive Officer, added, "This acquisition should immediately enhance our financial performance and create exciting new revenue drivers. Our complementary businesses—further enhanced by our combined deep bench of management talent—lay the foundation for new cross-selling opportunities, cross-brand collaboration, and cross-business support. These initiatives should accelerate revenue growth across our global platform and help drive long-term shareholder value. Jarden's global presence, capabilities and scale will help Waddington's expansion into new markets and geographies to further drive top-line growth and profitability. At the same time, Waddington should enhance and accelerate Jarden's growth in the B2B market. Potential future cost and distribution synergies will help support investments and drive bottom-line improvements across the Jarden platform."
Mike Evans, Waddington Group's President and Chief Executive Officer, added, "This is a significant milestone for Waddington. Jarden is well known as a stable, long-term owner of businesses, and this will provide us with a strong platform upon which to continue to expand. This acquisition provides us with the resources and scale necessary to further strengthen our existing product innovation and distribution capabilities to drive top- and bottom-line growth. I am confident that Waddington's employees share in my excitement as we look forward to becoming part of the Jarden family."
The transaction, which is expected to close in the third quarter of 2015, is subject to customary closing conditions and regulatory approvals.