Yankee Candle Co., a multi-channel retailer and manufacturer of scented candles and related gift products, has agreed to a merger under which an affiliate of investment firm Madison Dearborn Partners LLC will pay about $1.7 billion for all of Yankee’s outstanding shares of stock and the assumption of its debt.
Yankee Candle, No. 344 in the Internet Retailer Top 500 Guide to Retail Web Sites, also reported that its retail sales rose 24.6% year-over-year to $72 million for the third quarter ended Sept. 30, including sales from Illuminations, a multi-channel retailer it acquired earlier this year. Although it doesn’t break out web sales, Yankee Candle notes that its Consumer Direct web and catalog sales rose 30%, while comp store sales (excluding Illuminations) rose 8%.
Total Q3 sales including wholesale revenue rose 11.3% year-over-year to $87.5 million.
The Madison Dearborn Partners acquisition price breaks down as $1.4 billion for Yankee’s stock and about $300 million to absorb its debt. Yankee shareholders will receive $34.75 in cash for each share of common stock, reflecting a premium of more than 57% over the closing price of Yankee’s stock on July 25, 2006, the last trading day prior to Yankee’s announcement that it was seeking a potential buyer.
“Yankee’s board of directors, after extensive negotiations and careful consideration, concluded that this transaction was in the best interest of our shareholders,” says Craig Rydin, chairman and CEO of Yankee Candle.
Lehman Brothers served as financial advisor and Fried, Frank, Harris, Shriver & Jacobson LLP acted as legal advisor to Yankee Candle for the merger as well as for its review of strategic alternatives leading up to the merger. Merrill Lunch & Co. served as financial advisor and Kirkland & Ellis served as legal advisor to Madison Dearborn Partners.
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