As New York-based investment firm Wasserstein & Co. closes in on a potential deal to acquire Medford, OR-based Bear Creek Corp. for $260 million, industry sources have told CATALOG AGE that the multititle cataloger is commanding a lower than planned price tag. Sources estimate that the sale price is about $40 million-$90 million lower than the $300 million-$350 million price tag that Bear Creek’s owner, Yamanouchi Corp., had expected.
Bear Creek, which includes food cataloger/retailer Harry and David and horticultural mailer Jackson & Perkins, expects earnings before interest, taxes, depreciation, and amortization (EBITDA) for 2004 at $53 million, up from an estimated $40 million in EBITDA last year. Neither Wasserstein & Co. nor Yamanouchi Corp. returned phone calls, but sources speculate that Yamanouchi’s investment bankers may have misread the market because Bear Creek is not a pure direct marketing company. For instance, some of Bear Creek’s businesses, such as Jackson & Perkins, have an agricultural element that could be capital intensive, according to one source who spoke on the condition of anonymity.
CATALOG AGE reported last November that an offering memorandum had been sent to a select number of bidders to determine a possible sale. A Feb. 16 story in the New York Post also mentioned buyout firm Ripplewood Holdings and Thomas H. Lee Partners as potential suitors for the Bear Creek business should the Wasserstein deal fall through.