Sunbeam 2003 Annual Report Download - page 43

Jarden Corporation
Notes to Consolidated Financial Statements (continued)
activities under SFAS No. 133. SFAS No. 149 is generally effective for contracts entered into or modified
and for hedging relationships designed after June 30, 2003. The adoption of SFAS No.149 did not have a
material effect on the Company’s present financial condition or results of operations.
3. Acquisitions and Divestitures
On September 2, 2003, the Company acquired all of the issued and outstanding stock of Lehigh
Consumer Products Corporation and its subsidiary (“Lehigh” and the “Lehigh Acquisition”). Lehigh is
the largest supplier of rope, cord and twine for the U.S. consumer marketplace and a leader in
innovative storage and organization products and workshop accessories for the home and garage as well
as in the security screen door and ornamental metal fencing market. The purchase price of the
transaction was approximately $157.6 million, including transaction expenses, and was principally
funded by a draw down under the Company’s amended and restated senior credit facility (“Amended
Credit Agreement”) (see Note 9). In addition, the Lehigh Acquisition includes an earn-out provision
with a potential payment in cash or Company common stock, at the Company’s sole discretion, of up to
$25 million payable in 2006, provided that certain earnings performance targets are met. If paid, the
Company expects to capitalize the cost of the earn-out. Lehigh is included in the branded consumables
segment from September 2, 2003 (see Note 5).
On February 7, 2003, the Company completed its acquisition of the business of Diamond Brands
International, Inc. and its subsidiaries (“Diamond Brands” and the “Diamond Acquisition’), a
manufacturer and distributor of niche household products, including clothespins, kitchen matches,
plastic cutlery and toothpicks under the Diamond®and Forster®trademarks. The purchase price of this
transaction was approximately $91.5 million, including transaction expenses. The Company used cash
on hand and draw downs under its debt facilities to finance the transaction. The acquired plastic
manufacturing operation is included in the plastic consumables segment in 2003 and the acquired wood
manufacturing operation and branded product distribution business is included in the branded
consumables segment in 2003 (see Note 5).
On April 24, 2002, the Company completed its acquisition of the business of Tilia International, Inc.
and its subsidiaries (“Tilia” and the “Tilia Acquisition”). Pursuant to the Tilia Acquisition, the Company
acquired Tilia for approximately $145 million in cash and $15 million in seller debt financing. In
addition, the Tilia Acquisition includes an earn-out provision with a potential payment in cash or
Company common stock, at the Company’s sole discretion, of up to $25 million payable in 2005,
provided that certain earnings performance targets are met. If paid, the Company expects to capitalize
the cost of the earn-out.
The Lehigh Acquisition, the Diamond Acquisition and the Tilia Acquisition were all entered into as
part of the Company’s strategy of acquiring branded consumer products businesses with leading market
positions in niche markets for products used in and around the home, attractive operating margins and
strong management. The results of Lehigh, Diamond Brands, and Tilia have been included in the
Company’s results from September 2, 2003, February 1, 2003 and April 1, 2002, respectively.
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