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The Deal: Madison Dearborn Sells Yankee Candle to Jarden

Stocks in this article: JAH

NEW YORK ( The Deal) -- Consumer conglomerate Jarden (JAH) said Tuesday that it has agreed to acquire Yankee Candle Investments LLC from Madison Dearborn Partners LLC for about $1.75 billion.

Rye, N.Y.-based Jarden plans to fund the acquisition through a combination of cash and debt. Yankee Candle may also be entitled to receive an additional $55 million cash earn-out payment.

South Deerfield, Mass.-based Yankee Candle, founded in 1969, sells scented candles through its 561 self-branded stores in the U.S. Madison Dearborn of Chicago acquired the business in 2006 for about $1.7 billion.

Company officials said the deal will bolster Jarden's branded portfolio and give Yankee Candle the financial resources to expand into new markets.

"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," Yankee Candle CEO Harlan Kent said in a statement.

Jarden's portfolio includes Mr. Coffee coffee makers, First Alert home alarms, Bicycle playing cards and Ball fruit jars, among other products.

"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," Jarden CEO James Lillie said in a statement.

Since 2006, Yankee Candle's adjusted Ebitda has grown from $186 million to $206 million while its net sales have increased from $671 million to $804 million.

After closing, Jarden expects to have an adjusted Ebitda of around $7.7 billion on $1 billion in sales on a pro forma basis for the trailing 12 months ended June 30. Jarden said the acquisition should add up to 10% to its earnings before synergies.

Jarden has been acquisitive recently. In December, it acquired Lifoam Holdings, a maker of polyurethane products, from American Capital Ltd. for $60 million, around the same time it purchased sunscreen maker Babysun Group for undisclosed terms.

Madison Dearborn and Jarden expect to complete the transaction by year's end, pending regulatory approval.

Bank of America Merrill Lynch and Barclays plc advised Yankee Candle. Kirkland & Ellis LLP's Michael Paley, Tana Ryan and Rachel Cantor provided legal counsel.

Jarden shares opened 5% higher to $45.43 in Tuesday morning trading on the New York Stock Exchange, giving the company a market capitalization of about $5 billion.

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