Madison Dearborn doubles money on Yankee Candle

The $1.75bn exit comes following a terminated sale and scuttled refinancing for the candle retailer, which Madison Dearborn acquired in 2007.

Madison Dearborn Partners will sell US-based scented candle maker Yankee Candle to consumer products company Jarden Corporation for about $1.75 billion.

Madison Dearborn declined to comment on the transaction, but a source familiar with the matter said the exit will generate about a 2x return multiple following completion of the sale, which is expected to close during the fourth quarter of the year.

The transaction follows a terminated sale and scuttled refinancing for Yankee Candle, which bills itself as the largest scented candle company in the US. In June, Madison Dearborn cancelled plans for a $1.4 billion refinancing that would have distributed a $187 million dividend to the firm. Madison Dearborn was widely reported to be shopping the candle company earlier in the year for $2 billion, attracting bids from Bain Capital, Advent International, CVC Capital Partners, Clayton Dubilier & Rice and Ares Management before the auction was aborted. 

Despite the failed process, Yankee Candle has demonstrated clear growth under Madison Dearborn’s ownership. Net sales fell slightly to $681 million in 2009 but have grown every year since, rising to $844 million in 2012. Adjusted EBITDA also grew from $180 million in 2009 to $206 million in 2012.

Madison Dearborn bought Yankee Candle in 2007 for about $1.7 billion, including approximately $300 million in assumed debt. The deal marked Yankee Candle’s second private equity owner, as the candle company was first purchased by Forstmann Little in 1998.