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Yankee Candle has agreed to acquire the Candle Acquisition Co., operator of Illuminations.com, for about $22 million. Yankee also has hired Lehman Bros. to help it explore strategic alternatives, including sale of the company.
The Yankee Candle Co. Inc. today announced it has entered into a definitive agreement to acquire the Candle Acquisition Co., operator of Illuminations.com, for about $22 million in cash. Yankee also said it has hired Lehman Bros. to help it explore strategic alternatives, including a potential sale of the company.
Under the definitive agreement with Candle Acquisition, Yankee Candle-No. 344 in the Internet Retailer Top 500 Guide to Retail Web Sites, will acquire the Illuminations brand, together with related assets, including 15 Illuminations retail stores in California, Arizona and Washington. It also will acquire Illuminations Direct Consumer business, which includes Illuminations.com, No. 406 in the Internet Retailer Top 500 Guide to Retail Web Sites.
“The agreement to acquire the Illuminations brand is a strategic breakthrough for Yankee Candle,” said Craig W. Rydin, Yankee’s chairman and CEO. “This brand is closely aligned to our strategic intent to profitably build our business model by focusing on our core competency of premium candles.”
The transaction is expected to close by Aug. 1.
In announcing the hiring of Lehman Brothers, Rydin said the company is confident in its business strategy and optimistic about its future financial performance. “We and our board of directors also believe that we owe it to our shareholders to explore whether there are strategic alternatives available to us that would optimize shareholder value,” he said.
Yankee today reported that Consumer Direct sales increased 35% year-over-year. The company doesn’t break out online sales. Total sales for the quarter were $116.3 million, a 7% increase from $108.5 million a year earlier.