Jarden Acquires The Holmes Group
Jun 29, 2005
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Small appliance maker Jarden Corporation announced a definitive agreement to acquire privately-held small appliance maker The Holmes Group, Inc. The transaction is valued on a debt-free basis at approximately U.S. $625 million, consisting of approximately $420 million in cash and 4.1 million shares of Jarden common stock.

The transaction is expected to be immediately accretive to earnings and close during the third quarter, subject to customary closing conditions.

During the past 3 years, Jarden has made a series of acquisitions including that American Household, Inc. in 2005. Jarden says the Holmes acquisition will create new international cross-selling and distribution opportunities, particularly in Europe.

In addition, Holmes developed its own manufacturing, distribution, and new product development facilities in China within the last 5 years, and have had a presence in China for over 15 years.

Holmes has annual revenues of approximately $700 million and its products include Crock-Pot(R) slow cookers, Rival(R) roasters and deep fryers, and Bionaire(R) air purifiers and humidifiers.

"Today's announcement represents another important step in Jarden's long-term plan to grow and diversify our portfolio of niche branded consumer products into a world class consumer products company," Martin E. Franklin, Jarden's chairman and CEO, said. "Holmes' premier brands, leading market shares in their respective niche markets, and robust international operations fit well with our established operating criteria. Holmes had numerous meetings in the past several years to discuss a strategic combination with American Household, prior to its acquisition by Jarden."

He also said that in addition to Holmes' strong earnings, margins, and cash flow, the company is acquiring "a talented workforce with a proven track record of maintaining margin discipline, while supporting their brands and new product development in order to grow the top line organically."

Due to the share issuance related to the Holmes transaction, the company's board has approved a stock repurchase program of 1 million shares. Jarden intends to buy back up to 1 million shares of Jarden common stock in the second half of 2005, which is expected to be funded from free cash flow generated during this same period.

After completion of the transaction, Jarden said it expects to have yearly sales of approximately $3.4 billion and more than 16,000 employees.

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