North Castle Partners and its co-investors have agreed to sell Ignite USA, LLC, which makes thermal mugs and hydration bottles under the Contigo and Avex brands, to Newell Rubbermaid for a purchase price of $308 million.
ADVERTISEMENT Ignite is expected to deliver $125 million of net sales in 2014 and has a strong record of growth in the on-the-go thermal and hydration beverage containers market, achieving a historical four-year sales CAGR of 35 percent. The purchase price of $308 million is subject to customary working capital adjustments. The acquisition is expected to be accretive to Newell Rubbermaid's growth rate, normalized operating income margin and normalized EPS in the first year. Newell Rubbermaid plans to reinvest a portion of Ignite's profitability to more aggressively build the Contigo and Avex brands.
"Ignite has a great track record of growth, establishing a leading share position in two of the fastest growing consumer durable categories in North America," said Newell Rubbermaid President and CEO Michael Polk. "Their commitment to leverage great design to deliver differentiated products is evident in their results. The acquisition of Ignite marks the next step in the Growth Game Plan as we transform Newell Rubbermaid into a larger, faster growing, more global and more profitable company."
The acquired business will become part of the Home Solutions segment with Contigo and Avex joining the company's Rubbermaid, Calphalon, Goody and Levolor brands.
"Ignite's focus on design, product performance and constant innovation is a seamless fit with our Growth Game Plan strategy," said Mark Tarchetti, Chief Development Officer. "The Contigo brand has set the standard for the category and we are proud to make it part of our portfolio. This acquisition creates the opportunity to build a global beverage container business leveraging both the premium Contigo and mainstream Rubbermaid brands. We intend to invest behind the business to build on Ignite's current strong momentum, expanding product lines, channels of distribution and geographic footprint over time."
North Castle invested in Ignite in March 2013 and the transaction represents its first sale of a portfolio company from its recently closed fifth fund. "North Castle's mission is to partner with accomplished entrepreneurial management teams to build great companies that provide high quality, innovative products, which promote healthy and sustainable living," said Alison Minter, a North Castle Managing Director. "In partnership with Sami El-Saden, Ignite's CEO, we accelerated the company's growth by leveraging our experience with innovation-driven product businesses, such as Cascade Sports and Octane Fitness, as well as companies with mass market distribution and channel expansion experience, including Atkins Nutritional, Enzymatic Therapy, Flatout Flatbread, Leiner Health Products, and Avalon Natural Brands."
Managing Director Chip Baird said Ignite, as part of the Newell Rubbermaid family of brands, is well positioned to be a global leader in two of the fastest growing segments of the housewares industry.
El-Saden, who will remain CEO at Ignite, said Newell Rubbermaid make a great match because they share a commitment to building a brand and innovation-led company known for great design and superior product performance. "I enjoyed being a member of the North Castle family and was impressed by their values and commitment to partnership, as well as the knowledge and expertise of their team, particularly in the areas of strategy and brand, which set the foundation for us to take our company to its next level," said Sami El-Saden, CEO. "I am excited for Contigo to be part of the Newell Rubbermaid family of brands and believe they
Morrison Cohen LLP represented North Castle Partners and the company in the transaction.
North Castle's current portfolio includes such well-known brands as Curves International/Jenny Craig, Red Door Spas, Performance Bicycles, World Health, Octane Fitness and Ibex Outdoor Clothing. Prior portfolio company holdings include Atkins Nutritionals, Cascade Helmets, Equinox Fitness,.
