Jarden Corporation (NYSE: JAH) and K2 Inc. (NYSE: KTO) today announced they have signed a definitive merger agreement pursuant to which Jarden will acquire K2. Under the terms of the agreement, Jarden will pay $10.85 per share of K2 common stock in cash and will issue 0.1086 of a share of Jarden common stock (subject to adjustment as provided in the merger agreement) for each share of K2 common stock outstanding as of the closing. The cash and Jarden stock to be issued in the transaction has a combined value of approximately $15.50 per K2 share, based on the closing price of Jarden common stock on the date of signing the merger agreement. The total enterprise value of the transaction, including the assumption or repayment of indebtedness, is approximately $1.2 billion. The transaction is expected to be accretive to Jarden's earnings and to close early in the third quarter of this year.
With a portfolio of market leading brands, K2 is well regarded as a global product innovator and leader in a number of sports equipment markets. K2's portfolio of well-known brands includes Adio®, Ex Officio®, JT®, K2®, Marker®, Marmot®, Penn®, Rawlings®, Ride®, Sevylor®, Shakespeare®, Stearns®, Volkl® and Worth®.
Headquartered in Carlsbad, CA, K2 has a strong presence in North America as well as Europe and Asia and fits well with Jarden's stated strategy of building and acquiring leading, niche consumer-oriented brands. Its strength in the specialty and multi-store sporting goods, marine, and outdoor retail channels and proven international presence, combined with its focus on new product introductions and market innovations, would provide Jarden with significant growth opportunities and the ability to expand into adjacent markets. K2's primary business lines would be reported through Jarden's Outdoor Solutions segment upon closing of the transaction.
Commenting on the transaction, Martin E. Franklin, Jarden's Chairman and Chief Executive Officer, said, "We are enormously excited about today's announcement as it marks another important step in our planned and disciplined growth strategy as a world class, diversified, niche oriented consumer products company. Adding K2's broad portfolio of leading brands to our portfolio would create cross selling opportunities both domestically and internationally, would expand our presence in specialty channels, would further diversify our products, revenues and earnings, and would create additional scale to leverage in our supply chain, distribution, manufacturing and sourcing networks."
Richard J. Heckmann, K2's Executive Chairman of the Board, said, "We believe that Jarden is the perfect strategic partner for us. Combining our world-renowned brands with Jarden's scale and innovative resources should bring tremendous value to our employees, retail partners and customers. I am extremely proud of our employees' accomplishments over the last five years, and I am excited about the road ahead for K2 as part of the Jarden family."
Mr. Franklin concluded, "We believe the timing is ideal to make this acquisition. We have spent the last two years successfully integrating American Household and we believe that we now have the appropriate resources in place around the world to focus on delivering results from this combination. We feel that K2 is well positioned to continue its growth and that it will benefit from the leverage of our combined resources to deliver strong financial performance. I have been impressed by the many people I have met at K2 from around the world and I look forward to welcoming the K2 team to Jarden. We have always said that Jarden's most important assets are our employees, and our commitment to them, in addition to our customers and stockholders, will continue to guide our company."
The board of directors for both companies have unanimously approved the transaction, which is expected to close during the third quarter of 2007, subject to Hart-Scott-Rodino approval, the approval of K2's stockholders and other customary closing conditions.
Conference Call Information
Jarden and K2 will be hosting a conference call at 9:45 a.m. Eastern Time today, April 25, 2007, to further discuss this transaction and to review both company's first quarter 2007 results, also announced today. The call will be web cast simultaneously through the companies' websites, http://www.jarden.com and http://www.k2inc.net , and will be archived approximately one hour after completion of the call through May 9, 2007.
About K2 Inc.
K2 Inc. is a premier, branded consumer products company with a portfolio of leading brands including Shakespeare®, Penn®, Pflueger®, Sevylor® and Stearns® in the Marine and Outdoor segment; Rawlings®, Worth® and JT® in the Team Sports segment; K2®, Volkl®, Marker® and Ride® in the Action Sports segment; and Adio®, Marmot® and Ex Officio® in the Apparel and Footwear segment. K2's diversified mix of products is used primarily in team and individual sports activities such as fishing, watersports activities, baseball, softball, alpine skiing, snowboarding and in-line skating. Among K2's other branded products are Hodgman® waders, Miken® softball bats, Tubbs® and Atlas® snowshoes, Brass Eagle® and Worr Games® paintball products, Planet Earth® apparel and Sospenders® personal floatation devices.
Adio®, Atlas®, Brass Eagle®, Ex Officio®, Hodgman®, JT®, K2®, Marker®, Marmot®, Penn®, Pflueger®, Planet Earth®, Rawlings®, Ride®, Sevylor®, Shakespeare®, Sospenders®, Stearns®, Tubbs®, Volkl®, Worth® and Worr Games® are trademarks or registered trademarks of K2 Inc. or its subsidiaries in the United States or other countries.
About Jarden
Jarden Corporation is a leading provider of niche consumer products used in and around the home. Jarden operates in three primary business segments through a number of well recognized brands, including: Branded Consumables: Ball®, Bee®, Bicycle®, Crawford®, Diamond®, First Alert®, Forster®, Hoyle®, JavaLog®, Kerr®, Lehigh®, Leslie-Locke®, Loew- Cornell® and Pine Mountain®; Consumer Solutions: Bionaire®, Crock- Pot®, FoodSaver®, Harmony®, Health o meter®, Holmes®, Mr. Coffee®, Oster®, Patton®, Rival®, Seal-a-Meal®, Sunbeam®, VillaWare® and White Mountain™; and Outdoor Solutions: Abu Garcia®, Berkley®, Campingaz®, Coleman®, Fenwick®, Gulp®, Mitchell®, Stren® and Trilene®. Headquartered in Rye, N.Y., Jarden has over 20,000 employees worldwide. For more information, please visit www.jarden.com
