Acquisition Creates a Premier Housewares
Company Expected to Have $770 Million in Net Sales, Adjusted Pro
Forma EBITDA of More Than $85 Million and Unparalleled Portfolio of
Powerful Brands and Iconic Licenses
Highly Experienced and Complementary New
Management Team to be Led By Rob Kay as CEO and Jeffrey Siegel as
Executive Chairman
Significant Annual Cost Synergies of
Approximately $8 Million Expected to Be Realized in First Year
After Close
Transaction Expected to be Meaningfully
Accretive to Normalized EPS in the First Full Year After Close
Shareholders of Filament, led by Centre
Partners, to Own 27% of Lifetime
Lifetime and Filament to Host Conference Call
at 9:00 am ET Today
Lifetime Brands, Inc. (NasdaqGS:LCUT) (“Lifetime” or “the
Company”), a leading global provider of branded kitchenware,
tableware and other products used in the home, and Filament Brands
(“Filament”), an established, category leader and innovator in the
housewares industry, today announced that they have entered into a
definitive agreement under which Lifetime will acquire Filament, a
portfolio company of Centre Partners, a leading middle market
private equity firm, in a cash and stock transaction. Based upon
the closing price of Lifetime common stock on December 21, 2017,
the transaction values Filament at an enterprise value of
approximately $313 million, which represents a pro forma adjusted
EBITDA multiple of approximately 6.3x, inclusive of synergies and
the effect of the net present value of inherited tax
attributes.
After the closing, Lifetime will have an enhanced portfolio of
products with #1 positions in key product areas, a diversified
customer base with marquee partnerships and a robust product
development team and pipeline. With approximately $178 million in
revenue in the latest twelve month period ended September 2017,
Filament offers top brands that combine longstanding heritage with
best-in-class product development and design, including Rabbit,
Chef’n, Taylor, Salter and Springfield. By adding Filament’s
marketing and consumer engagement capabilities to Lifetime’s
expertise in sales, ecommerce, sourcing and IT infrastructure,
Lifetime will be strongly positioned to deliver and develop more
products for more customers around the world.
“We are pleased to welcome the Filament business, brands and
people to Lifetime,” said Jeffrey Siegel, Lifetime’s Chairman and
Chief Executive Officer. “This transaction brings together two
highly complementary companies and positions Lifetime with the
scale, brands and capabilities to compete and win in today’s
dynamic global environment. Filament has firmly established itself
as a leader of high-end design and innovation in the branded
consumer products sector. With its attractive positions in
non-traditional, high-growth channels, Filament will help extend
Lifetime’s reach into important new segments and create new
opportunities for our business. This transaction represents a
significant milestone for our company, our shareholders and our
customers, and we are confident that joining forces gives us the
opportunity to accelerate our growth plans and create value for all
our stakeholders.”
Mr. Siegel continued, “Rob Kay is a seasoned executive with more
than 20 years of experience building and running companies. I look
forward to working closely with Rob, and I am confident that he is
the right person to lead Lifetime upon closing to capitalize on the
significant opportunities ahead.”
“Over the past five years, we structured our best-in-class
design, engineering, operations and marketing to drive innovation
and offer products that are stylish and functionally relevant,”
said Rob Kay, Chief Executive Officer of Filament Brands. “Today’s
announcement is a testament to our relentless customer focus and to
the hard work of our talented creative and professional teams.
Together with Lifetime, with its robust sales, ecommerce, sourcing
and IT infrastructure, we’ll be able to bring even more great ideas
to market and drive significant value creation over the long-term.
Lifetime is a company I have known and admired, and I look forward
to continuing to grow the business, investing in its world-class
brands and creating opportunities for the tremendously talented
people of both companies.”
Bruce Pollack, Managing Partner of Centre Partners, said, “This
transaction represents a significant opportunity to transform our
investment into a new company that is even stronger – financially,
operationally and strategically. We are proud of what Filament has
achieved the last five years in building a true leader in the
branded consumer products sector, and we believe that Lifetime is
an ideal partner for Filament as it enters its next phase of
growth. We are confident in the strategic and financial merits of
this transaction, both today and over the long-term, and look
forward to maintaining a significant ownership stake in Lifetime
and to contributing to its success going forward through our Board
service.”
Compelling Strategic and Financial Benefits of
Transaction
- Increased Scale and Infrastructure
to Expand Revenue and Margins: The transaction will create a
company with a significantly expanded and more efficient global
footprint, including leadership positions and strengthened
operations, sales, sourcing, IT, ecommerce and R&D platforms.
The result is a transformed company that is uniquely positioned to
bring high-margin products to new markets, and drive new and deeper
customer relationships and enhanced profitability. Lifetime’s
robust, industry-leading sales infrastructure will further enable
deep retailer and consumer relationships across an expanded global
footprint.Lifetime is committed to continuing to invest in R&D
and product innovation, which it expects will grow stronger with
the addition of Filament’s expertise and development capabilities.
Furthermore, the Company's significantly enhanced financial
position and resources will enable it to further invest in its
best-in-class brands, including product development and marketing
opportunities, generating short- and longer-term growth, including
internationally.
- Enhanced Product Portfolio and
Best-in-Class Innovation Engine: The acquisition will extend
Lifetime’s reach into important new home products segments and
bolster the Company’s industry-leading design capabilities with the
addition of Filament’s best-in-class product development and design
expertise. With the addition of Filament, Lifetime will have over
1,000 patents worldwide across over 20 brands and 27 categories,
including #1 positions in kitchenware, tableware, kitchen and bath
measurement, portable beverage and barware. With an enhanced
product development engine, Lifetime expects to accelerate the
creation of new products that anticipate consumer demands across
various price points and geographies. The Company’s expanded
ecommerce capabilities and strengthened retailer relationships will
ensure that Lifetime’s expanded product portfolio reaches even more
customers in attractive markets around the world.
- Highly Diversified Customer
Base: Lifetime and Filament have highly complementary customer
bases, serving overlapping accounts with distinct product
offerings. By bringing together two diversified customer bases and
channel mixes, Lifetime will have stronger key partnerships with
blue-chip retailers, including Amazon, Walmart, Costco and
Starbucks. No customer will represent more than 15 percent of
sales. Furthermore, with the addition of Filament, Lifetime will be
able to offer unique trend forecasting abilities that retailers
increasingly rely on to provide consumer preference insights and
points of differentiation.
- Strong Financial Profile to Drive
Future Growth: With the acquisition of Filament, Lifetime will
have an enhanced financial profile, with expected pro forma net
sales of approximately $770 million and pro forma EBITDA of more
than $85 million. At the close, Lifetime is expected to have a net
debt / EBITDA ratio of less than 4.0x, with the Company expected to
reach its target net debt / EBITDA ratio of below 3.0x within two
years of close as a result of the significant free cash flow
generation.Lifetime expects the transaction to be meaningfully
accretive in the first full year after close. In addition, Lifetime
expects the transaction to be accretive to EBITDA margins by
approximately 400 basis points.
- Substantial Cost-Savings: The
integration of Lifetime and Filament is expected to generate $8
million of annual run-rate cost synergies in the first year after
the close of the transaction. Actions to capture these savings
include supply chain consolidation, sales and marketing
efficiencies and elimination of overlapping back office
functions.
Headquarters, Management and Board of Directors
Lifetime will continue to be headquartered in Garden City, New
York, with a significant presence in Seattle, Washington, and will
maintain its regional facilities around the world. Upon completion
of the transaction, Rob Kay, CEO of Filament, will become CEO of
Lifetime. Jeffrey Siegel, currently Chairman and CEO of Lifetime
Brands, will become Executive Chairman of the Company. Daniel
Siegel will remain President of the Company and Ronald Shiftan will
remain Vice Chairman of the Board.
In conjunction with the closing of the transaction, Mr. Kay and
two representatives of Centre Partners, Bruce Pollack and Michael
Schnabel, will join the Company’s Board, which will expand to 13
directors.
Transaction Terms and Financing
Based upon the closing price of Lifetime common stock on
December 21, 2017, the transaction is valued at $313 million, a
multiple of 6.3x, including estimated synergies and the present
value of inherited tax attributes, and consists of a combination of
cash and common stock. Lifetime will issue to Filament’s equity
holders at closing newly-issued shares representing 27 percent of
Lifetime Brands common stock on a fully diluted basis after
accounting for the issuance of additional shares. Lifetime will
also pay an agreed amount of cash, which is expected to be used to
(x) repay preferred equity holders, (y) fund other
transaction-related obligations, and (z) repay certain outstanding
debt.
Lifetime intends to fund the cash portion with proceeds obtained
from a newly committed $275 million senior secured term loan and a
$150 million new asset based loan.
At the completion of the transaction, Filament’s equity holder
will enter into a customary lock-up and standstill agreement for
the Lifetime shares it receives.
Approvals
The transaction, which is expected to close in the first half of
2018, is subject to, among other things, the expiration or
termination of the applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, Lifetime
shareholder approval, and other customary closing conditions.
Jeffrey Siegel, Daniel Siegel, Clifford Siegel and Ronald
Shiftan, who collectively own approximately 11 percent of the
outstanding stock of Lifetime, have entered into voting agreements
in support of the transaction.
Advisors
Sawaya Partners is serving as financial advisor to Lifetime and
Morgan, Lewis & Bockius LLP is serving as its legal advisor.
Houlihan Lokey also acted as a financial advisor to Lifetime.
Harris Williams & Co is serving as financial advisor to
Filament and Paul Weiss Rifkind, Wharton & Garrison LLP is
serving as its legal advisor.
Conference Call, Webcast and Presentation
Lifetime and Filament will host a conference call today, Friday,
December 22, 2017, at 9:00 am ET. The live audio webcast and
accompanying presentation can be accessed via Lifetime Brands’
Investor Relations website at
http://lifetimebrands.gcs-web.com/investor-relations. The audio
webcast will be archived for replay for 60 days following the
conference.
Individuals who wish to dial into the conference call may do so
at (866) 610-1072. International callers should dial (973) 935-2840
and enter the conference ID 2169598. A digital recording will be
available. To access the recording, US/Canada callers should dial
(800) 585-8367 or (404) 537-3406, and enter the conference ID
2169598.
About Rob Kay
Rob Kay, 55, is a seasoned operating executive with more than 20
years of experience building and running companies. In addition to
his role as CEO of Filament Brands, Rob is an Operating Partner
with Centre Partners, a leading middle market private equity firm.
Prior to joining Filament Brands, Rob held senior roles at several
companies in the manufacturing and consumer products space,
including serving as the Principal Executive Officer of Kaz, Inc.
until its acquisition by Helen of Troy in 2010; as Principal
Executive Officer of OneCare, a portfolio company of Norwest
Partners; President and CEO of Key Components, Inc.; and as SVP and
CFO of Oxford Resources, Corp., at that time a NASDAQ-listed
company. Rob began his career at Deloitte & Touche where he
spent several years as a management consultant.
About Filament Brands
Filament is a category leader and innovator in the housewares
industry. Brands under the Filament banner include: Rabbit, RBT,
Houdini, Chef'n, VIBE, Taylor Kitchen, Taylor Bath, Taylor Weather,
EatSmart, Springfield and Salter. Filament brands have wide
distribution and are sold all over the world. Retailers and
consumers look to Filament brands to deliver innovative solutions
in, and around the home. Filament evokes a vibrant, smart, aligned
team steeped in history and pushing the boundaries of ingenuity. An
inspired group of people and products produced by a unified spark
to do better. For additional information, please visit
www.filamentbrands.com
About Centre Partners
Founded in 1986, Centre Partners is a leading middle-market
private equity firm focusing on the consumer and healthcare
sectors, with offices in New York and Los Angeles. Centre has
invested over $2 billion of equity capital in more than 80
transactions since its inception. Centre seeks to partner with
founders and management teams to build exceptional businesses.
Centre Partners provides management teams access to its unique
resources, which includes an extended network of experienced and
proven operating executives. Additional information is available at
www.centrepartners.com.
About Lifetime Brands, Inc.
Lifetime Brands, Inc. Lifetime Brands is a leading global
provider of kitchenware, tableware and other products used in the
home. The Company markets its products under well-known kitchenware
brands, including Farberware®, KitchenAid®, Sabatier®, Amco
Houseworks®, Chicago™ Metallic, Copco®, Fred® & Friends,
Kitchen Craft®, Kamenstein®, Kizmos™, MasterClass®, Misto®, Mossy
Oak®, Swing-A-Way® and Vasconia®; respected tableware and giftware
brands, including Mikasa®, Pfaltzgraff®, Fitz and Floyd®, Creative
Tops®, Empire Silver™, Gorham®, International® Silver, Kirk
Stieff®, Towle® Silversmiths, Tuttle®, Wallace®, Wilton Armetale®,
V&A® and Royal Botanic Gardens Kew®; and valued home solutions
brands, including Bombay®, BUILT NY® and Debbie Meyer®. The Company
also provides exclusive private label products to leading retailers
worldwide. The Company’s corporate website is
www.lifetimebrands.com.
Forward-Looking Statements
The Company’s statements related to the proposed acquisition of
Taylor contain forward-looking statements, including statements
regarding expected benefits of the acquisition and the timing and
financing thereof. Actual results could differ materially from
those projected or forecast in the forward-looking statements.
Factors that could cause actual results to differ materially
include the following: the Company’s stockholders may not approve
the transaction; the conditions to the completion of the
transaction may not be satisfied; debt financing may not be
available on favorable terms, or at all; closing of the transaction
may not occur or may be delayed, either as a result of litigation
related to the transaction or otherwise; the parties may be unable
to achieve the anticipated benefits of the transaction; revenues
following the transaction may be lower than expected; operating
costs, customer loss, and business disruption (including, without
limitation, difficulties in maintaining relationships with
employees, customers, and suppliers) may be greater than expected;
the Company may assume unexpected risks and liabilities; completing
the acquisition may distract the Company’s management from other
important matters; and the other factors discussed in “Risk
Factors” in the Company’s Annual Report
on Form 10-K for the fiscal year ended
December 31, 2016 and subsequent filings with the SEC, which
are available at http://www.sec.gov. The Company assumes no
obligation to update the information in this communication, except
as otherwise required by law. Readers are cautioned not to place
undue reliance on these forward-looking statements that speak only
as of the date hereof.
Additional Information and Where to Find It
Certain aspects of the proposed acquisition will be submitted to
the Company’s stockholders for their consideration. In connection
with the proposed acquisition, the Company will prepare a proxy
statement for the Company’s stockholders to be filed with the SEC,
and will mail the proxy statement to its stockholders and file
other documents regarding the proposed acquisition with the SEC.
The Company urges investors and stockholders to read the proxy
statement when it becomes available, as well as other documents
filed with the SEC, because they will contain important
information. Investors and security holders will be able to receive
the proxy statement and other documents free of charge at the SEC’s
web site, http://www.sec.gov. These documents can also be obtained
(when they are available) free of charge from the Company upon
written request to the Corporate Secretary, Lifetime Brands, Inc.,
1000 Stewart Avenue, Garden City, NY 11530.
Participants in Solicitation
The Company and its directors and executive officers and other
members of management and employees may be deemed to be
participants in the solicitation of proxies from the Company’s
stockholders in favor of the approval of the issuance of the shares
of the Company’s common stock in connection with the acquisition.
Information regarding the persons who may, under the rules of the
SEC, be deemed participants in the solicitation of the Company’s
stockholders in connection with the proposed acquisition will be
set forth in the proxy statement when it is filed with the SEC. You
can find information about the Company’s executive officers and
directors in its definitive proxy statement for its 2017 Annual
Meeting of Stockholders, which was filed with the SEC on May 1,
2017. You can obtain free copies of such definitive proxy statement
using the contact information above.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171222005208/en/
Lifetime Brands, Inc.:Laurence Winoker, 516-203-3590Chief
Financial Officerinvestor.relations@lifetimebrands.comorJoele
Frank, Wilkinson Brimmer KatcherDan Katcher / Alyssa Cass /
Andrew Squire212-355-4449orFilament Brands:Alyssa
CiambrielloLippe
Taylor212-473-7236aciambriello@lippetaylor.comorCentre
Partners:KekstMark Semer / Peter
Hill212-521-4800mark.semer@kekst.com / peter.hill@kekst.com
Lifetime Brands (NASDAQ:LCUT)
Historical Stock Chart
From Jun 2024 to Jul 2024
Lifetime Brands (NASDAQ:LCUT)
Historical Stock Chart
From Jul 2023 to Jul 2024