Lifetime Brands to Acquire Filament Brands
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
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 millionand 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 tobe accretive to EBITDA margins by approximately 400 basis points.
- Substantial Cost-Savings: The integration of Lifetime and Filament is expected to generate
$8 millionof 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
In conjunction with the closing of the transaction, Mr. Kay and two representatives of
Transaction Terms and Financing
Based upon the closing price of Lifetime common stock on
Lifetime intends to fund the cash portion with proceeds obtained from a newly committed
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.
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.
Conference Call, Webcast and Presentation
Lifetime and Filament will host a conference call today,
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/
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,
Founded in 1986,
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
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
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
Lifetime Brands, Inc.:
Laurence Winoker, 516-203-3590
Chief Financial Officer
Joele Frank, Wilkinson Brimmer Katcher
Dan Katcher / Alyssa Cass / Andrew Squire
Mark Semer / Peter Hill
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