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Harry & David Holdings Inc. announced that it will sell the Jackson & Perkins rose-growing business to two unaffiliated buyers for $49 million, $46 million of which is payable in cash at closing.
Harry & David Holdings Inc.’s Harry & David Operations Corp. and its Jackson & Perkins operations subsidiary have agreed to sell the Jackson & Perkins business to two unaffiliated buyers for $49 million, $46 million of which is payable in cash at closing.
The transaction includes the sale of the direct marketing and wholesale business, the Jackson & Perkins brand, catalog, e-commerce site and associated inventory. That includes its premium rose plants, horticultural products and home and garden decor, as well as direct marketing and wholesale customer lists and relationships.
Harry & David Holdings, No. 94 in the Internet Retailer Top 500 Guide, has agreed to provide transitional assistance including agricultural and horticultural services through the end of June, certain wholesale operational services during 2007, and certain direct marketing operational services and rose fulfillment through the end of June 2008.
The divestitures are expected to yield a modest gain for the fiscal year ending June 30, 2007, the company says.
Jackson & Perkins was founded in 1872 and calls itself the nation’s largest marketer of premium rose plants. It grows the plants on approximately 3,200 acres and harvests more than six million rose plants annually. Jackson & Perkins generated net sales of approximately $74 million over the past twelve months, Harry & David says.
“The decision to divest Jackson & Perkins was made only after careful consideration of its strategic fit with our core gift and gourmet food businesses,” says Bill Williams, Harry & David Holdings’ president and CEO. “Having determined that it did not fit with our long-term goals, we are pleased that this divestiture will allow us to focus on our core businesses and further strengthen our financial position.”
The buyers are an investment group led by Donald and Glenda Hachenberger. The Hachenbergers own several businesses in the horticultural industry, including Southern Sun, a technology company involved in plant propagation.
The transaction also includes the sale of approximately 3,200 acres in Wasco, Calif., and associated buildings and equipment to a private investment group in California.
Both transactions are expected to close in Harry & David’s fourth fiscal quarter ending June 30, 2007. The sale of the Wasco property is subject to the completion of the sale of the direct marketing and wholesale business.
Harry & David Holdings, which is owned by Wasserstein & Co. LP, was advised in the transactions by WR Hambrecht + Co.