Marlin Equity Partners has purchased Chatterbox, a scrapbooking supply company, as an add-on acquisition for its retail portfolio company Ultra*Pro. Ultra*Pro will combine Chatterbox with its 7gypsies scrapbooking brand.
Financial terms of the deal weren’t disclosed, though Ultra*Pro chief executive Adam Lerner told PEO Chatterbox sales for 2008 are projected to hit between $5 million (€3.4 million) and $10 million.
He said one of the biggest assets being acquired in the deal is design talent in the form of Chatterbox founder Melody Ross, whom he characterised as “one of the divas in the scrapbooking space”.
Lerner added: “She is to scrapbooking what Mrs. Fields is to cookies.”
Scrapbooking “is an industry we’re pretty excited about”, said George Kase, a Marlin Equity principal. “You’ve got retail sales in the US in the $2.5 billion range. And a lot of changing dynamics”, such as increased participation among big box retailers like Bain Capital Partners-owned craft chain Michaels Stores.
This segment of the craft/hobby market has already attracted private equity investment. Chicago firm GTCR Golder Rauner entered the scrapbooking sector in 2006 with its acquisition of EK Success, a company that has a 20-year contract with Martha Stewart Living Omnimedia to make and market products. In August 2007, GTCR added on Wilton Industries and Dimensions Holdings to create Wilton Products.
“We’re just starting to get active in this space and there is no shortage of scrapbooking businesses for sale out there today,” Lerner says.
This is Ultra*Pro’s third add-on in the last three months: In October, Marlin purchased Hanover Accessories, a company focussed on the kid, “tween”, teen and pet markets, and in November it purchased Stravina, a designer and marketer of name-personalised gifts and novelties. Marlin hopes to add on a fourth company soon; it purchased Ultra*Pro in June 2007.
The Los Angeles-based firm closed a $300 million turnaround fund in November 2007, its second vehicle since spinning out of the Gores Group.