LIFETIME SETS A BIGGER TABLE WITH MOVES.
CHICAGO-With the recent acquisition of Syratech, Lifetime Brands added to its growing list of product categories and, analysts said, helped shore up the tabletop company's finances and management.
Going into the recent International Home & Housewares Show, Lifetime also announced an agreement to manufacture and distribute Pedrini kitchenware, barware and bakeware. Plans include expanding the Pedrini line to other housewares product categories.
Going another step beyond its gadget roots, Lifetime Brands acquired Syratech for $37 million in cash and $12.5 million in stock.
Syratech owns the Wallace Silversmith, Towle Silversmith, International Silver Co., Melannco International and Element brands, and licenses Cuisinart and Kenneth Cole Reaction Home for tabletop, expanding Lifetime's presence in better tabletop by launching the company into flatware, home decor and picture frame categories.
The deal underscores Lifetime's financial health, which is powering its acquisition strategy. Lifetime carries little long-term debt and nearly doubled its sales recently with the purchase of Pfaltzgraff and assets from Salton last year, marking its entrance into better tabletop. Provided the deal closes in April, Lifetime expects Syratech to add about $100 million in revenues in 2006 and be nominally profitable for the year. Syratech's revenues were approximately $138 million in 2005.
"Lifetime makes it their business to have a strong balance sheet," said Gary Giblen, an analyst with Brean Murray Carret & Co., "and has the ability to move on acquisitions, in contrast to so many other companies in kitchenwares and housewares that are plagued by being overleveraged."
In a research note on the deal, Giblen points out that Lifetime is paying only 36 percent of revenues for Syratech, much lower than is usual for branded businesses. "It was an exclusive sale rather than an auction or competitive bid process because of Lifetime's long relationship with Syratech's founder, former chief executive and tabletop industry icon, Lenny Florence," he wrote. The acquisition should help stabilize Syratech's management and operations with regard to Florence's illness, and also address leverage issues. The company emerged from voluntary Chapter 11 bankruptcy in June 2005.
Giblen's report also notes that Lifetime gains new channels of distribution.
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|Title Annotation:||Lifetime Brands acquire Syratech Corp.|
|Publication:||HFN The Weekly Newspaper for the Home Furnishing Network|
|Date:||Mar 20, 2006|
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