Jarden Corporation entered into a definitive purchase agreement to acquire Visant Holding Corp., the parent company of Jostens, Inc. and other entities comprising the Jostens business, for an enterprise value of approximately $1.5 billion.
The business was brought from investment funds managed by KKR, aPriori Capital Partners, and other stockholders with the purchase price equaling to approximately 7.5x adjusted EBITDA.
Jostens product portfolio is made up of yearbooks, class and championship rings for students and professional athletes, caps and gowns, diplomas, and varsity jackets and other products that have helped schools and students “celebrate moments that matter since 1897.”
The transaction adds a market-leading, niche consumer brand to Jarden's portfolio, brings customizable production capabilities in printing, jewelry, and apparel, deepens Jarden's talent bench, and is expected to enhance Jarden's overall gross profit and EBITDA margins.
Jostens, which generates approximately $740 million in annual revenue, will be reported as part of Jarden's Outdoor Solutions segment, which owns more than two dozen sporting goods brands. Including Jostens, Jarden's combined revenue for the 12 months ended June 30, 2015 would have been approximately $10 billion. Jarden has received a financing commitment for the full amount it needs to consummate the transaction and may choose to fund a portion of the transaction with excess cash on hand, bonds, bank debt and/or common equity.
The transaction meets Jarden's disciplined acquisition criteria, adding to Jarden's revenue and distribution diversity. Jostens is a market-leading niche business with strong margins and cash flow that complements Jarden's team sports and educational fundraising businesses. The Company expects the acquisition to enhance its margin and cash flow profile. The transaction is expected to be accretive to Jarden's adjusted earnings per share in 2016.
Jarden CEO James E. Lillie said the acquisition is expected to enhance Jarden Corp.'s gross profit and operating margins in 2016.
Synergies with Rawlings
“We believe we can expand and further diversify our revenue and strengthen relationships in the educational and achievement channel as we develop revenue synergies across Jostens' platform, Rawlings scholastic sports equipment and uniform business, as well as Yankee Candle's scholastic fundraising business. All three businesses have unique and well-established relationships in this channel. Jostens, as a trusted partner in the educational and achievement channel, enhances Jarden's unique access to this channel. Jarden's consumer products capabilities and scale will help accelerate Jostens expand into new products and adjacent markets to support top-line growth and profitability. We expect that cost synergies generated will be largely reinvested into product innovation.”
Jostens is excited to leverage the resources and brand expertise of Jarden to elevate its commitment to schools and universities throughout the world, according to Chuck Mooty, Jostens' president and CEO.
“This is a significant milestone for Jostens,” he said. “Jarden's scale and track record of making long term investments will provide Jostens the ability to innovate and develop powerful new products and services to accelerate our growth. Our exceptional employees and sales representatives will be highly energized to be a part of the Jarden family.”
The transaction, which is expected to close in the fourth quarter of 2015, is subject to customary closing conditions. Barclays and Morgan Stanley & Co. LLC acted as financial advisors and Kane Kessler, P.C. acted as legal counsel to Jarden on the transaction. Jefferies LLC acted as financial advisor and Simpson Thacher & Bartlett LLP acted as legal counsel for Visant.
Jarden operates in three primary business segments through a number of well recognized brands, including: Branded Consumables: Ball, Bee, Bernardin, Bicycle, Billy Boy, Crawford, Diamond, Envirocooler, Fiona, First Alert, First Essentials, Hoyle, Kerr, Lehigh, Lifoam, Lillo, Loew-Cornell, Mapa, Millefiori, NUK, Pine Mountain, Quickie, Spontex, Tigex, Waddington, Yankee Candle and YOU; Outdoor Solutions: Abu Garcia, AeroBed, Berkley, Campingaz and Coleman, Dalbello, ExOfficio, Fenwick, Greys, Gulp!, Hardy, Invicta, K2, Marker, Marmot, Mitchell, PENN, Rawlings, Shakespeare, Squadra, Stearns, Stren, Trilene, Volkl and Zoot; and Consumer Solutions: Bionaire, Breville, Cadence, Crock-Pot, FoodSaver, Health o meter, Holmes, Mr. Coffee, Oster, Patton, Rainbow, Rival, Seal-a-Meal, Sunbeam, VillaWare and White Mountain.