North Castle Partners has agreed to sell Ignite USA LLC for nearly 2.5 times projected 2014 sales to Newell Rubbermaid just 17 months after investing in the company alongside its owner and CEO Sami El-Saden.
Newell Rubbermaid (NYSE:NWL) has agreed to pay $308 million for Ignite, which manufactures and markets thermal mugs and hydration bottles under the Contigo and Avex brands. Ignite sales have been growing at a compound annual growth rate of 35 percent over the last four years and are expected to reach $125 million this year.
“This acquisition creates the opportunity to build a global beverage container business leveraging both the premium Contigo and mainstream Rubbermaid brands,” said Mark Tarchetti, chief development officer for NWL, which generated. “We intend to invest behind the business to build on Ignite's current strong momentum, expanding product lines, channels of distribution and geographic footprint over time.”
NWL plans to fold Ignite into its Home Solutions segment, which owns the Rubbermaid, Calphalon, Goody and Levolor brands. The segment generated sales of $1.6 billion in 2013. NWL expects Ignite to accelerate its growth rate and be accretive to its adjusted operating income margin and EPS within a year of closing. The company said it will reinvest a portion of Ignite's profits to more aggressively build the Contigo and Avex brands.
North Castle invested in Ignite in March 2013 and the transaction represents its first sale of a portfolio company from its recently closed fifth fund. El-Saden will continue to lead the business at NWL.
“In partnership with Sami El-Saden, Ignite's CEO, we accelerated the company's growth by leveraging our experience with innovation-driven product businesses, such as Cascade Sports and Octane Fitness, as well as companies with mass market distribution and channel expansion experience, including Atkins Nutritional, Enzymatic Therapy, Flatout Flatbread, Leiner Health Products, and Avalon Natural Brands,” said North Castle Managing Director Alison Minter.
