By Amanda Schiavo
NEW YORK (TheStreet) — Shares of Jarden Corp.(JAH – Get Report) are higher by 2.58% to $52 in pre-market trading on Wednesday morning, after the consumer products company announced it will acquire the privately heldVisant Holdings Corp. for $1.5 billion.
Visant is the parent company of yearbook and school memorabilia maker Jostens.
Jarden is a Boca Raton, FL-based consumer products company with brands including Yankee Candle, Mr. Coffee, Sunbeam, Bionaire, Chub and more.
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The company will acquire Visant from the private equity firms KKR & Co. and APriori Capital Partners in a deal about 7.5 times Visant’s earnings before interest, taxes, depreciation and amortization.
With this transaction Jarden will add a market leading, niche consumer brand to its portfolio that is expected to enhance the company’s overall gross profit and EBITDA margins.
“We believe our approach to driving organic growth and creating value through continued investments in product development and innovation should underpin additional meaningful long-term value from this acquisition,” Jarden founder and Executive Chairman Martin Franklin said in a statement.
Separately, TheStreet Ratings team rates JARDEN CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
We rate JARDEN CORP (JAH) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company’s strengths can be seen in multiple areas, such as its growth in earnings per share, compelling growth in net income, revenue growth, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company shows low profit margins.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- JARDEN CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, JARDEN CORP increased its bottom line by earning $1.29 versus $1.21 in the prior year. This year, the market expects an improvement in earnings ($2.76 versus $1.29).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Household Durables industry average. The net income increased by 64.9% when compared to the same quarter one year prior, rising from $52.10 million to $85.90 million.
- JAH’s revenue growth trails the industry average of 12.7%. Since the same quarter one year prior, revenues slightly increased by 1.5%. Growth in the company’s revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 57.14% and other important driving factors, this stock has surged by 25.52% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock’s sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Household Durables industry and the overall market, JARDEN CORP’s return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full analysis from the report here: JAH
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