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Jarden to Buy American Household for $745 Million

The consumer products company would add such brands as Mr. Coffee, Coleman and Sunbeam to its lineup with the acquisition.

September 21, 2004|From Reuters

Consumer products company Jarden Corp. said Monday that it would buy privately held American Household Inc. for $745.6 million, adding Mr. Coffee and an array of other housewares to its product line.

Boca Raton, Fla.-based American Household is a successor to appliance maker Sunbeam Products Inc., which changed its name two years ago as it distanced itself from a troubled past that saw it slide into bankruptcy protection under former Chief Executive Al Dunlap.

Its brands include Coleman, First Alert, Oster and Sunbeam, as well as Mr. Coffee.

Martin Franklin, Jarden chairman and CEO, said the deal would immediately add to earnings, excluding any restructuring and one-time charges, but he did not provide specific figures.

"The combination will create new sales, marketing as well as operating synergies that we expect to lead to margin improvements in the future," he said in a statement.

But during a conference call with analysts, he cautioned that Jarden's cash flow margins could experience some pressure as the firm worked to integrate the new businesses into existing operations.

Combined, the firms are expected to have annual revenue of $2.6 billion, Jarden said.

In conjunction with the deal, private equity firm Warburg Pincus will take a 27.5% stake in Jarden for a $350-million investment the equity firm provided to help fund the acquisition, Jarden said.

On completion of the acquisition, Rye, N.Y.-based Jarden will hold the No. 1 or No. 2 market position in many of its core consumer product categories, including warming blankets, smoke alarms and professional grooming products, the firm said.

It added that the transaction was expected to close during the first quarter of 2005.

Jarden shares rose as high as $39.15 in early trading, their best level in almost five months, but then fell back as the company sought to explain the wisdom behind the acquisition. The shares closed 30 cents higher at $35.55 on the New York Stock Exchange.

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