March 16, 2012 - 4:31pm EST by
2012 2013
Price: 39.20 EPS $2.31 $0.00
Shares Out. (in M): 80 P/E 17.0x 0.0x
Market Cap (in $M): 3,136 P/FCF 11.0x 0.0x
Net Debt (in $M): 2,786 EBIT 523 0
TEV (in $M): 5,922 TEV/EBIT 11.3x 0.0x
Borrow Cost: NA

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  • Rollup
  • dividend cut
  • Self-tender


We view Jarden Corporation (JAH) as a very attractive short candidate at current levels.  In our opinion, JAH is a serial acquirer with low quality of earnings and highly suspect corporate governance.  The stock has recently traded up after the company announced a modified Dutch tender for up to $500mn worth of stock (12.1mn shares were ultimately purchased at $36 per share).  At the time of the announcement JAH also announced lackluster Q4 results and the suspension of its dividend.  We view Jarden’s most recent financial maneuvering as nothing more than a creative way to temporarily drive shares higher while increasing EPS in 2012 enabling the company to maximize management compensation.  

Company Description:  Jarden is a hodgepodge of various semi-discretionary consumer products.  Jarden consists of four business segments: Outdoor Solutions, Consumer Solutions, Branded Consumables and Process Solutions. The company has operations in the US, as well as in Asia, Canada, Europe and Latin America.

Background:  In March 1993, Ball Corporation spun off its canning business as a new company called Alltrista Corporation.  The company operated as primarily a canning business until 2001.  Jarden, as we know it today, was essentially created in 2001, when Martin Franklin came to Alltrista.  Franklin had previously bought a minority stake in the company along with some partners.  Franklin was rebuffed when he wanted to buy the company, and demanded a couple of seats at the board's table.  Within three months, Franklin had the seat at the head of the table as chairman and CEO, while Ian Ashken became vice chairman and CFO. The duo moved headquarters from Indianapolis to Rye, New York.  The following year, the company’s name changed to Jarden - "Jar" for the Ball jars it makes and "den" for the use of its goods in the home.

In 2001, Alltrista had $305mn in sales.  Over the course of the next decade, Franklin focused on engaging in significant acquisition activity, which has driven sales to over $6.7bn in 2011.  In April 2002, Alltrista acquired Tilia International for $145 million, who owned the trademark to Foodsaver.  In November 2002, Jarden purchased Diamond Brands, which had been in Chapter 11 bankruptcy proceedings.  In September 2003, Jarden acquired Lehigh Consumer Products Corporation. In March 2004, Jarden acquired Loew-Cornell, a maker of brushes and other arts and crafts supplies. In June 2004, Jarden bought a 75% stake in the privately held U.S. Playing Card Company, and in October 2004 it purchased the remaining 25%. In January 2005, Jarden acquired American Household (formally known as Sunbeam), which was comprised of The Coleman Company, First Alert, and Sunbeam Products, Inc. (Sunbeam, Health o meter, Mr. Coffee, and Oster).  In July 2005, Jarden acquired The Holmes Group, maker of home and kitchen products (Crock-Pot, Seal-a-Meal), for approximately $420 million in cash and 6.2 million shares of Jarden common stock.  In September 2006, Jarden acquired PineMountain firelogs, candles, and firestarters from Conros Corporation. By August 2007, Jarden acquired K2 Sports for about $700mn, whose brands included K2, Marmot and Rawlings. Since 2007, the company has bought several other businesses such as MapaSpontex, Quickie Manufacturing, and Aero Products, for several hundred million dollars.

Below average business model:  Typically, we find many consumer companies to have attractive business models that have double-digit operating margins, pricing power, strong brands, sustainable/profitable growth, strong balance sheets, and attractive returns on capital. Jarden, has none of these attributes.  JAH operates in low growth categories in developed markets such as the US and Europe.  Sales growth for the majority of its categories are tied to GDP growth and in a bullish case scenario, typically grow low-single-digit.  Its brands are average at best, when considered relative to the majority of mid to large cap consumer companies’ brands.  This has ultimately lead Jarden to have weak pricing power and less bargaining with suppliers, resulting in a single digit margin business model.

While Jarden’s long-term competitive profile and growth outlook are relatively weak, in our view, Jarden’s financials are equally disappointing.  Despite massive acquisitions, which management has claimed to have led to sizeable synergies, the company still has single digit margins.  We’d note that the reported single digit margins exclude the on-going charges Jarden’s management backs out of their “operating” results.  Returns on capital are low.  As shown in Table 1 below, based on GAAP results, return on capital is roughly around 5% - below the company’s cost of capital.

Table 1              
      2007 2008 2009 2010 2011YTD
GAAP EBIT     $232 $146 $387 $407 $438
Taxes @ 35.5%   ($82) ($52) ($137) ($145) ($155)
Net operating profit less taxes   $150 $94 $250 $263 $283
Invested capital   $4,665 $4,411 $4,232 $5,155 $5,114
ROIC     3.2% 2.1% 5.9% 5.1% 5.5%
* Invested capital defined as total assets - cash - non-interest bearing current liabilites  

The company’s balance sheet has high leverage for a consumer company, with total debt of $3.1bn before its recent Dutch tender (management stated the its leverage ratio rose to over 3x EBITDA post the tender).  Jarden’s balance sheet is primarily composed of intangible assets and goodwill. For perspective, the company ended 2011, with total assets $7bn, of which $3bn was made up of intangibles and goodwill from prior acquisitions.

True underlying free cash flow is mixed.  The company points investors to free cash flow defined as cash from operations less capex.  However, this is highly misleading, in the case of Jarden.  Due to its acquisitive nature, Jarden has continuous earn-out payments from prior acquisitions that do not flow through the income statement or cash flow from operations, but instead they show up in the cash flows from investing.  As an attempt to hide the true cash outlay from earn outs over the past few years, Jarden began combining earn outs with cash outlays from acquisitions.  We believe earn-outs exist despite managements’ unwillingness to provide details.  For example, in 3Q11, the company paid out $13mn in the cash flow line for acquisitions and earn-outs. Since there were no acquisitions that we are aware of, we presume it was for earn-outs.  In addition, the company is starving capex to generate cash flow to buyback stock to shrink the share count to meet earnings projections.  We believe this action could lead to challenges looking farther out.  For example, as shown in Table 2, capex as a percent of sales has continued to decline this year versus last and reinvestment, defined as capex/depreciation, continues to decline and is well below 1x.  JAH’s closest comparable peer, Newell Rubbermaid, has capex around 3.5% of sales. Also, for perspective, in 2011, sales were up $657mn, but capex was down $11mn. This is despite three acquisitions (MapaSpontex, Quickie Aero Products) consolidated into the financial statements in 2011.  Lastly, the company has averaged around $20mn per year in debt issuance costs over the past several years, which is reflected in cash from financings, allowing management to exclude the cost from its free cash flow calculation.

Table 2                      
  2009 1Q10 2Q10 3Q10 4Q10 2010 1Q11 2Q11 3Q11 4Q11 2011
Sales              5,153              1,189              1,548              1,602              1,684              6,023              1,483              1,674              1,785              1,738              6,680
Capex                 107                   15                   50                   31                   42                 138                   27                   24                   28                   48                 127
capex % sales 2.1% 1.2% 3.2% 1.9% 2.5% 2.3% 1.8% 1.4% 1.6% 2.7% 1.9%
D&A 114                   27                   31                   33                   37                 127                   35                   37                   36                   37                 145
TTM capex/D&A 0.9x 0.6x 1.6x 0.9x 1.1x 1.1x 0.8x 0.7x 0.8x 1.3x 0.9x


Low quality of earnings:  The majority of the consumer companies that we follow have among the highest quality of earnings of any sectors in the market.  The on-going occurrence of restructuring charges and impairment charges are kept to a minimum.  However, Jarden is the exact opposite.  It seems that every earnings release includes non-recurring charges.
  • A definition of “Jarden” EPS

First, the company has its own “operating” earnings, or as we like to call “Martin Franklin” earnings (MF EPS). The list of items that the company excludes from its GAAP results to derive “operating” results is laughable, and makes a mockery of standard GAAP accounting.  Below, is an excerpt from Jarden’s April 2011 proxy, on what Jarden’s compensation committee defines as “operating” or “adjusted” EPS.

…the Committee included in EPS adjustments for:

• reorganization and acquisition-related integration costs and other items;

• manufacturer's profit in inventory charged to cost of sales which is the purchase accounting fair value adjustment to inventory;

• impairment charges to goodwill and other intangible assets;

• mark-to-market net gain primarily associated with the Company's Euro denominated debt;

• amortization of acquired intangible assets;

• devaluation and hyperinflationary charges related to Venezuela; and

• a tax provision adjustment which reflects the normalization of the as adjusted results to the Company's 35.5% effective tax rate.

Table 3 below, highlights Jarden GAAP EPS vs MF EPS

TABLE 3 2004 2005 2006 2007 2008 2009 2010 2011 5-Yr Cumulative
GAAP EPS $0.99 $0.22 $1.59 $0.38 -$0.78 $1.52 $1.19 $2.31 $4.62  
"Marty Franklin" EPS $1.47 $1.63 $2.20 $2.33 $2.74 $2.60 $2.90 $3.43 $14.00  
Variance -$0.48 -$1.41 -$0.61 -$1.95 -$3.52 -$1.08 -$1.71 -$1.12 -$9.38  
  • Jarden has very low quality of earnings.  The company has continued to take millions of dollars in accounting charges over the last several years. For perspective, over the past 4 years, Jarden has reported over $550mn in charges (over $13/share).
  • Given management contends business is good, why all the restructuring and impairment charges?  Jarden management tells the investment community that business is good, growth is good, and the future is bright. We disagree. We cannot think of any company we have followed, that has taken around $380mn in impairment charges over the past four years, and continuously said business is just great.  
Table 4         2008 2009 2010 2011 2008-2011E
Impairment of goodwill and other intangible assets $283.0 $22.9 $18.3 $52.5 $376.7
Reorganization and acquisition-related integration costs $59.8 $48.5 $52.4 $45.6 $206.3
Total         $342.8 $71.4 $70.7 $98.1 $583.0

Management has continuously indicated to sell-side analysts and the investment community that charges are set to disappear. Below is commentary from Jarden’s 2Q10 earnings conference call.

 “We also recorded $3.5 million in related expenses associated with the transaction, which was netted against our fore-mentioned mark-to-market gains. We recorded an $18 million charge related to the write down of goodwill associated with our arts and crafts business brand within Branded Consumables. We do not anticipate any additional impairment charges in the second half of the year.” - Ian Ashken, Jarden Corporation -  CFO, 2Q10 earnings conference call

Since 2Q10, Jarden has reported over $50mn in asset impairment charges. Due to highly subjective accounting charges, it allows JAH to manage earnings, in our view. For perspective, Jarden has beaten “analyst” EPS expectations for over 15 quarters in a row.

Jarden is a serial acquirer:  We are typically highly skeptical of extremely acquisitive companies.  The combination of successfully integrating a business is easier said than done, in our view.  In addition, acquisitive management teams have considerable flexibility with financial results due to the moving parts within the financial statements.  Historically, growth begins to slow for a company, which in turn prompts an acquisition to boost earnings. The story keeps going, until it doesn’t.

  • Acquisitions have helped mask weak underlying profitability.  Since 2006, Jarden has done 12 acquisitions for a value of over $1.6bn. For reference, Jarden’s current market capitalization is only $3.6bn. The “growth by acquisition story” has made it difficult to determine Jarden’s underlying organic growth profile combined with all the accounting related charges.  We believe acquisitions have likely masked what has been disappointing underlying profitability as witnessed by millions of dollars in impairment charges over the last few years.
  • Jarden’s most recent acquisitions are increasingly suspect.  Jarden’s most recent acquisitions took place in December 2010. Jarden acquired Quickie Manufacturing, a manufacturer and supplier of conventional household cleaning tools in retail channels in North America, for an estimated $200mn. Quickie was previously owned by Centre Partners Management, which made their originally investment in 2004.  We estimate that Quickie had around $200mn in sales when Jarden purchased the company.  Buying a low growth, low margin North American consumer business for nearly 1x sales seems like a very rich price to us.  Centre Partners stated the “exit "generated about five-times the invested capital and around 30%" internal rate of return.”  We find the discrepancy between Centre Partners estimate for sales for Quickie of around $200mn versus Jarden’s estimate of $125mn (as disclosed on Jarden’s 4Q10 earnings conference call) as very curious.  Below is an excerpt from a January 2011, Deal Magazine interview by David Jaffe, of Centre Partners. Jaffe, who owned the Quickie business for over 5 years, stated he believed Quickie would generate more than $200mn in sales for Jarden in 2011.


Centre Partners Exits Mop Maker Quickie, Gets 5x Return

Mohammed Aly Sergie, LBO Wire, 12/21/2010




Centre Partners Management LLC sold household cleaning products maker Quickie Manufacturing Corp. to Jarden Corp. for an undisclosed amount.

Bruce Pollack, a managing partner at Centre, said the exit "generated about five-times the invested capital and around 30%" internal rate of return.

“The company (Quickie) will generate revenue of more than $200 million for Jarden this year”, says (David) Jaffe.  (http://www.thedeal.com/magazine/ID/038094/2011/centres-december-surprise.php)


“Turning from contribution to acquisitions, Jarden Home and Family contributed approximately $190 million in the quarter. Beginning in Q1, 2011 we will be consolidated Quickie into the Branded Consumables segment results. In 2009, Quickie generated approximately $125 million in net sales.” - Ian Ashken, Jarden Corporation, CFO, 4Q10 earnings conference call

So, why is there such a huge disconnect between that sales impact from Quickie, from what Jarden management told investors on its conference call and the former owner of Quickie. We believe that Jarden management has attempted to downplay the sales impact from the Quickie acquisition from the last few quarters. By understating the sales impact from Quickie, it has potentially allowed Jarden to overstate organic growth trends as the Quickie sales were surely added to consolidated sales which drove higher total revenue growth.  Jarden breaks out the revenue composition by organic growth, M&A, and currency. By understating the impact of Quickie’s sales, it lowers the sales impact from M&A, and by default implies a much higher organic revenue growth number – clearly very favorable for Jarden.  Lastly, if Quickie sales were really closer to Jarden’s estimate of $125mn, then it implies Jarden bought the business for nearly 1.6x sales for a sponge and rubber glove business.

  • What about Jarden’s acquisition of Aero Products in October 2010?  What we find equally concerning is Jarden’s acquisition of Aero Products, a provider of air mattresses. Jarden management spoke highly of the acquisition and it offered Jarden new avenues for growth and an attractive addition to the Jarden portfolio.

 However, our analysis, would suggest otherwise. Aero Products was acquired by Investcorp in 2002. Our analysis of historical Investcorp financial reports, suggest Aero Products was anything but successful. In fact, it was a disaster. Investcorp bought the business for $121mn in equity and sold for an estimated $70mn in 2010. Below are excerpts from Investcorp annual filings in regard to Aero Products. 

 June 2003 - Aero Products, acquired in December 2002 for $121 million of equity. Aero is the recognized market leader in high quality, air-filled bedding products in the United States. The company also designs and markets a complete line of innovative and proprietary products including air-filled pools, furniture and other leisure products

 June 2004 - Aero is the recognized market leader in high quality, air-filled bedding products in the United States. The company designs and markets a complete line of innovative and proprietary bedding products. Following acquisition of the company in December 2002, several key strategic initiatives have been completed, including a European market entry strategy, and the development of a secondary source of supply in Asia. The company added a new Chief Executive Officer and Chief Financial Officer as well as sales and marketing executives during the fiscal year. Aero’s current business priorities include increasing its presence in Wal-Mart, further expanding European distribution, and implementing its new product development plan.

 June 2005 - Aero’s focus includes coordinated product development and channel management, a revamped marketing initiative to continue to build the Aero brand and the build-out of the company’s international presence. Aero continues to build sales with its core US retail customers, posting sales gains in each of its five largest accounts in 2005.

 June 2006 - Against the background of an increasingly competitive market, Aero continues to focus on expanding its product reach via sales channel management, an enhanced marketing initiative and the continued build-out of the company’s international presence. Aero is also focused on controlling costs and maintaining margins through better supply chain management and focused discretionary spending. Notwithstanding these initiatives Aero’s operating performance has been short of expectations, leading to pressure against debt covenants that the company is actively engaged in addressing.

 June 2007 - Under new management stewardship, Aero has undertaken a comprehensive exercise to develop a business plan focused on completion of a market study, improved purchase and overhead management, development of a new product and channel management strategy, a revamped marketing initiative and a strategy to ensure build-out of the company’s international presence. Notwithstanding these initiatives, Aero’s performance continues to fall short of expectations and faces a challenging set of circumstances in the near-term as the company is repositioned for growth against a backdrop of difficult internal and external issues. The transaction was closed in 2002.

 June 2008 – Aero has performed well through the first half of the 2008 calendar year, and management is hopeful it will meet budget expectations. However, the slowing US economy with increasing financial pressures on consumers will likely have a negative impact on the retail sale of Aero products. Overall, Aero’s performance continues to fall short of expectations and faces a challenging set of circumstances in the near-term as the company is repositioned for growth against a backdrop of difficult external issues.  The acquisition was closed in December 2002.

 June 2009 - The current downturn in consumer spending has had a negative impact on demand for Aero’s products. To mitigate this trend, Aero has undertaken significant cost reduction and cost containment efforts while still investing, where necessary, to position it for long-term growth and market penetration. The company has also intensified its new customer sales effort and has secured product placement at two major retailers in the past 12 months. Aero’s financial performance in the coming months will depend in part on how quickly demand for consumer products returns. Given the current lack of visibility, Aero continues to closely monitor discretionary spending and working capital to enhance profitability and liquidity. In May 2009, Investcorp invested an additional $4 million in support of the company in the form of subordinated debt, further bolstering Aero’s position during this downturn. The acquisition closed in December 2002.

 June 2010 - Aero retained strong shelf space in calendar 2009 due to its strong brand recognition and penetrated new accounts such as Walmart and Carrefour. In particular, the company enjoyed strong growth in international markets by leveraging its strong brand and customer reputation. The company also focused on controlling its selling, general and administrative spend and maintaining adequate liquidity. As a result, it is positioned to realize improved performance when spending returns to previous levels. However, Aero’s performance in 2009 was negatively impacted by the continued slowdown in consumer spending. While some rebound in performance is expected, Aero’s future performance does remain largely dependent on the timing and scale of the upturn in consumer activity. Management is attentively monitoring retail traffic so that any positive or negative trends are recognized and early action taken. The acquisition closed in December 2002.

 12/2010 H1 FY11 - We sold Aero Products International to a strategic buyer in a transaction that valued Aero at an enterprise value of $70 million. This demonstrated our ability to act opportunistically in a difficult environment to exit a more challenged investment.

 Jarden management = bad actors:  We find the corporate governance at JAH to be very poor.

First, let’s discuss Jarden’s most recent announcement on January 24, 2011. The company pre-announced barely in-line 4Q11 profitability, additional restructuring and impairment charges, but in an attempt to prevent a sell-off in their shares (and potential force a margin call on executives), the company announced a $500mn modified Dutch tender offer for its shares in a price range of $30 to $33 by using existing cash, issuing new debt (did we mention the company already has a bad balance sheet?), and eliminating its dividend.  Sell-siders applauded this financing engineering. The accretion would be sizeable. Consensus 2012 EPS of $3.68 would optically move to closer to $4.30-$4.50 based on accretion of the full $500mn in accelerated buybacks.  However, what about Martin Franklin and team? What do they get?  The company’s compensation committee has set targets for Martin Franklin and the senior management of achieving $4.50 in order to have millions of restricted stock becoming vested.  The financial engineering announced, will in effect, allow the company to engineer their way to higher EPS and closer to their EPS target – which will then vest restricted stock of nearly $40mn (2.5mn stock options and 3.4mn restricted shares) for Martin Franklin, Ian Ashkin, and Jim Lille alone. On February 21, 2012, JAH increased the price on the original tender offer to $32-$36 per share from $30-$33 previously. In addition, the company noted that management would be selling into the tender offer. In effect, by repurchasing 12.1mn at $36, management will likely be receiving 5.9mn shares- very creative indeed.  Also, management stated that they would be SELLING 526,000 shares into the tender offer. This is a week after the company had a conference call telling investors the stock was undervalued!! Lastly, we find it very odd that the stock traded well above the original tender price offer when the first tender price range was announced. We ask ourselves, how did the market know the JAH management would likely increase the tender price range above $33?

Per the proxy:

Messrs. Franklin, Ashken and Lillie received performance-based equity awards in January 2010 of 1,000,000, 250,000 and 150,000 shares, respectively. The grant date fair value of these performance awards were $32 per share. Should the performance condition be met, the maximum value of these awards would be $32,000,000, $8,000,000 and $4,800,000, respectively. The restrictions on these awards will lapse ratably when the Company's EPS for any fiscal year ending on or before December 31, 2014 equals or exceeds certain specified thresholds in the grant, with vesting commencing when EPS exceeds $4.50 and full vesting occurring when EPS equals or exceeds $5.00. At grant date the outcome of achieving the performance conditions was deemed improbable for purposes of FASB ASC Topic 718. (Source: JAH 2011 proxy)

Second, the management team is engaged in pledging stock as collateral, we always raises our eyebrows given prior historical “blowups” around management pledging stock.  From Jarden’s 2011 proxy:



Common Stock


Name and Address


Shares Beneficially
Owned (1)



Percent of Common
Stock (2)


TIAA-CREF Investment Management, LLC/College Retirement Equities
Fund-Stock Account/Teachers Advisors, Inc.
730 Third Avenue
New York, NY 10017











Horizon Asset Management, Inc.
40 East 52nd Street
New York, NY 10022











Blackrock, Inc.
40 East 52nd Street
New York, NY 10022











Martin E. Franklin











Ian G.H. Ashken











René-Pierre Azria












William J. Grant












Michael S. Gross












Richard J. Heckmann












Douglas W. Huemme












Richard L. Molen












Irwin D. Simon












Robert L. Wood












James E. Lillie












John E. Capps












Richard T. Sansone












All directors, nominees for directors, and executive officers as a group (16 persons)









(6) Includes 970,000 shares which have been pledged to a stock brokerage firm as collateral by Mr. Franklin.

(7) Includes 111,978 shares which have been pledged to a stock brokerage firm as collateral by Mr. Ashken.


Third, Jarden’s management team has the luxury of management perks. As highlighted in a Wall Street Journal article, “Corporate Jet Set: Leisure vs. Business”(June 2011),  it appears management continues to use the corporate jet for more than just business. Over the past three years, Jarden’s corporate plan has traveled to Aspen, CO, where Martin Franklin owns a home and often considers his primary residence, 56 times or nearly 1.5x per month. Las Vegas and St. Johns Antigua were other favorites, which company traveling to each location 8 and 5 times, respectively.

Fourth, in addition to running Jarden for years, Martin Franklin continues to engage creating shell companies over the world. He is tied to Freedom Acquisition Holdings (FRH-U). Most recently he started a SPAC named Liberty Acquisition Holdings.

Finally, it appears management likes to create businesses outside of Jarden and then monetize those assets through selling them to Jarden. For example, in January 2009, Jarden bought ZuitSports for $2.2mn in cash, plus consideration for a $14.4mn in earnouts. Martin Franklin, Ian Ashken, and James Lillie, all happened to be stakeholders in ZuitsSports. Below is an except for Jarden 2010 proxy.

ZuitSports, Inc:  On January 13, 2009, K-2 Corporation ("K-2"), a wholly-owned indirect subsidiary of the Company, acquired substantially all of the assets of ZuitSports, Inc., a manufacturer of high-performance apparel, footwear, wetsuits and accessories for multisport athletes ("ZuitSports"). Martin E. Franklin, Ian G.H. Ashken and James E. Lillie, the Company's Chairman and CEO, Vice Chairman and CFO and President and Chief Operating Officer, respectively, were shareholders in ZuitSports, owning approximately 20.4%, 1.4% and 2.7%, respectively.No consideration was distributed by ZuitSports to its shareholders at the closing of the acquisition. However, the transaction included the potential for earn-out consideration payable in either cash or stock of the Company over the six years following the closing.

Valuation:  While JAH valuation may appear reasonable with shares around 10x 2012 P/E, but this is based off of adjusted EPS (MF EPS) which excludes any potential one-time charges.  We do not view this as compelling, especially vs comparable peers such as NWL, who trades at 11x P/E and has a 1.7% dividend yield and has better balance sheet. From a GAAP EPS perspective, JAH valuation is lofty, with shares valued at 17x trailing EPS.

          Valuation Leverage Price Performance
NAME Ticker Price Market Cap (M) EV (M) LTM EV/EBITDA LTM P/E P/E '13E Dividend Yield Net debt/ EBITDA Net Debt/Cap 52 Wk Low 52 Wk High % Chg YTD
NEWELL RUBBERMAID INC NWL $18.51 $5,338 $7,348 7.7x 12.8x 10.1x 1.7% 2.4x 50% $10.87 $19.81 15%
ENERGIZER HOLDINGS INC ENR $76.43 $4,995 $6,997 8.1x 14.2x 11.3x 0.0% 2.3x 42% $62.98 $84.94 -1%
TUPPERWARE BRANDS CORP TUP $63.22 $3,549 $4,021 9.3x 15.7x 11.2x 2.3% 1.1x 43% $49.86 $71.99 13%
CHURCH & DWIGHT CO INC CHD $48.56 $6,915 $6,916 11.4x 22.9x 18.3x 2.0% 0.0x 0% $36.78 $49.30 6%
KIMBERLY-CLARK CORP KMB $72.94 $28,715 $34,910 10.0x 15.2x 13.2x 4.1% 1.5x 44% $61.00 $74.25 -1%
AVON PRODUCTS INC AVP $18.95 $8,166 $10,244 7.0x 11.3x 11.0x 4.9% 1.5x 42% $16.09 $31.60 8%
LIFETIME BRANDS INC LCUT $10.51 $131 $225 7.4x 8.5x 6.8x 1.0% 2.9x 39% $8.46 $16.40 -13%
HELEN OF TROY LTD HELE $33.23 $1,050 $1,263 7.2x 9.9x 8.5x 0.0% 2.1x 28% $23.83 $36.75 8%
LIBBEY INC LBY $13.38 $275 $614 5.7x 14.9x 10.2x 0.0% 3.2x 80% $9.45 $17.43 5%
VF CORP VFC $148.10 $16,380 $18,154 11.2x 18.4x 13.8x 1.9% 1.3x 27% $91.60 $150.00 17%
COLUMBIA SPORTSWEAR CO COLM $49.21 $1,659 $1,415 7.9x 16.2x 13.9x 1.8% -1.4x -23% $41.13 $70.64 6%
Average:         8.4x 14.5x 11.7x 1.8% 1.5x 34% $37.46 $56.65 6%
JARDEN CORP JAH $39.35 $3,136 $5,922 8.6x 17.0x 8.8x 0.0% 3.1x 46% $25.60 $40.00 32%
* JAH GAAP before charges EBITDA $686mn, EPS $2.31                      
** Pro-forma debt $3.3bn, cash $500mn                          


For #s in the header of this write-up, we assume the following assumptions for our proforma EV calculation post the tender offer. 

Pro forma





Stock Price



Mkt cap













net debt









We generally find that the most profitable short opportunities consist of businesses run by promotional management teams who implement a “growth by acquisition” strategy using aggressive accounting tactics.  We believe Jarden is a company run by stock promoters who use financial engineering, substantial leverage and a growth through acquisition strategy to mask a portfolio of low-growth marginally profitable consumer businesses.  Shares have rallied significantly in the last two months on the back of a leveraged stock repurchase providing what we think is an attractive entry to short the stock.



  • The market begins to recognize that the true economics of JAH business model are not reflected in adjusted earnings. 
  • Integration of prior acquisitions becomes increasingly difficult
  • A poorly calculated acquisition


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