New York-based private equity firm Center Lane Partners has sold Capital Brands, an American company that develops and sells domestic appliances with a focus on wellness nutrition to households, to Milan-listed Italian group De’ Longhi (see here the press release). The latter paid the US company 420 million dollars, equal to an EV/ebitda adjusted multiple expected for 2020 of just over 8x. The consideration for the transaction will be paid by drawing on De ‘Longhi’s liquidity reserves. The closing of the transaction is expected by the end of 2020. The De ’Longhi Group was advised by BofA Securities, White & Case and Ernst & Young, while Center Lane Partners were followed by Goldman Sachs and PJ Solomon.
With this transaction, the United States becomes the first market for the De ’Longhi group, with aggregate turnover exceeding 500 million dollars. Nutribullet and Magic Bullet, highly recognizable brands of Capital Brands, have earned a high reputation among consumers in a short period of time. The strengths and skills of Capital Brands will help accelerate the growth of the De ’Longhi Group in the world of healthy food.
Massimo Garavaglia, ceo of De’ Longhi, comments: “This acquisition is a perfect fit for the De’ Longhi Group and is consistent with our objectives of geographical expansion and growth by external lines. Moreover, it represents a strategic value from several viewpoints: we add a young and dynamic brand to our portfolio; we enlarge our range of iconic products with an important presence in the blender segment; we increase our penetration in an expanding and strategically important market like the USA; and last, but not least, we strengthen the De’ Longhi Group’s leadership in the sector of food preparation”.
Rich Krause, ceo of Capital Brands, said: “We are very pleased to be joining the De’ Longhi Group and to have the opportunity to align our strong brands with theirs. We are excited about the future growth opportunities that we will be able to exploit in the US and internationally with the support of our new shareholder”.
Capital Brands, founded in 2003 and headquartered in Los Angeles, California, develops products in the home nutrition sector, marketed in over 100 markets around the world under the Nutribullet and Magic Bullet brands. The American company has successfully created the blender segment, which is valued at approximately 1.1 billion dollars in the United States alone, becoming a class leader in North America and other key markets globally such as Australia, New Zealand and UK. Capital Brands estimates net revenues of approximately 290 million dollars for the year 2020, up from last year.
De ‘Longhi is one of the main global operators in the sector of small appliances dedicated to coffee, cooking, air conditioning and home care. Listed since 2001 on the MTA segment of the Italian Stock Exchange, it distributes its products under the brands De’ Longhi, Kenwood, Braun and Ariete. The group has over 8,500 employees and operates in more than 120 markets. De ‘Longhi closed 2019 with revenues of 2.1 billion euros, an adjusted ebitda of 295 millions and a net profit of 161 millions.