Warburg Pincus adds $350m to Jarden

The global private equity firm’s investment will be used to acquire American Household in a $746m deal and will give Warburg Pincus an almost 30 percent stake in the consumer products company.

Global private equity firm Warburg Pincus has agreed to invest $350 million (€287 million) in the $745.6 million (€613 million) acquisition of American Household by publicly held consumer products company Jarden Corporation.

The purchase price also includes the assumption of American Household’s debt. According to Jarden’s chairman and chief executive officer Martin Franklin, the investment by Warburg Pincus will give the firm a slightly under 30 percent stake in his company.

Jarden, based in Rye, New York, markets in several niche consumer categories, including home canning, kitchen matches, plastic cutlery, playing cards and toothpicks. The purchase of American Household, which produces, among other things, coffeemakers, smoke alarms, sleeping bags, tents and coolers, will bring popular brand names such as Coleman, Sunbeam and Mr. Coffee under the Jarden umbrella.

Franklin said the partnership with Warburg Pincus was based on a personal relationship he had with the firm’s co-president Chip Kaye. “When we first discussed the strategic objectives with regards to American Household, he had expressed high regard for that company.” Jarden had been considering the American Household purchase since the early summer.

Franklin said that although Jarden could complete the purchase without any private equity capital, “we decided it was in the best interest of maintaining conservative ratios on the balance sheet.”

The acquisition stands to make Jarden one of the top two largest sellers of smoke alarms, camping equipment, kitchen matches, toothpicks, twine and other consumer products. The transaction is expected to close in the first quarter of 2005.

American Household, based in Boca Raton, Florida, was formed after publicly traded Sunbeam, who had sought Chapter 11 bankruptcy protection back in February 2001, emerged in December 2002 as a private company. At the time Sunbeam filed for bankruptcy protection, it had $3.2 billion in debt, most of it taken on when the company Coleman, First Alert and Signature Brands USA.