Trio of Buyers to Acquire Brookstone

Apr 17, 2005 5:19 AM  By

Merrimack, NH-based gadgets and gifts cataloger/retailer Brookstone, which mails the Gardener’s Eden, Hard-to-Find Tools, and Brookstone catalogs, announced on April 15 that it has signed a definitive agreement to be sold.

Buying the $499 million company is a consortium consisting of OSIM International, a Singapore-based retailer of health and lifestyle products; Boston-based private equity firm JW Childs Associates; and Temasek Holdings, a Singapore-based investment company.

The buyers are paying $20.50 a share, or $432.6 million, for the publicly held Brookstone. That’s a nearly a third more than the $15.60 a share that Brookstone closed at the night before the announcement.

At a multiple nearing nine times, “it looks like a healthy price and from an interested foreign buyer,” says Mal Appelbaum, president of New York-based Appletree Advisors. “Asian buyers are becoming active again.”

The transaction is expected to be completed in Brookstone’s second or third fiscal quarter of 2005. The transaction is subject to approval by Brookstone’s shareholders, funding under the financing commitments, and other customary conditions.

In a release, Brookstone says the deal will help it expand globally and boost its product development capabilities. OSIM’s product line complements that of the eponymous Brookstone brand, with many overlapping items such as foot massagers. OSIM has more than 700 stores in Asia, Australia, Africa, the Middle East, the U.K. and North America. Brookstone has 288 stores in North America and Puerto Rico as well as a handful of Gardeners Eden stores.

The current Brookstone senior management team, including CEO/chairman of the board Michael Anthony, will remain with the company.

Brookstone increased its annual revenue 15% last year, from $434 million in 2003. Same-store sales rose 6%. Direct marketing sales increased 21%, to $91 million for the year ended Jan. 29.