The company that touted itself as the “nonflowers alternative” best get working on a new tag line. On Sept. 2, Vermont Teddy Bear Co. purchased the net assets of fresh-flowers cataloger Calyx & Corolla. Shelburne, VT-based Vermont Teddy Bear paid Equity Resource Partners $3.7 million in cash and stock for Vero Beach, FL-based Calyx, along with the assumption of certain working capital liabilities.
Andy Williams, president of Equity Resource Partners, will serve on Vermont Teddy Bear’s board of directors. Williams will also remain president of Calyx & Corolla. Wellesley, MA-based investment bank Tully & Holland represented Equity Resource Partners in the deal.
Unlike most catalog industry mergers and acquisitions, the deal came together quickly. “I wasn’t even in acquisition mode,” says Vermont Teddy Bear CEO Liz Robert. But a letter from Tully & Holland “caught my attention on a Friday night [July 11], and I thought about it all weekend. By Monday [July 14], we signed a confidentiality agreement” to proceed with the transaction.
In addition to its core business of manufacturing and marketing high-end gift teddy bears, Vermont Teddy Bear operates gourmet foods catalog TastyGram, which launched last October, and gifts delivery business PajamaGram, which launched in April 2002. In bringing the new property into the fold, “we will move slowly,” Robert says. “We won’t do anything without market research and careful thought.” She does expect to promote Calyx via direct response radio ads, a medium used successfully to launch the Vermont Teddy Bear and TastyGram brands.
In its fiscal year ended June 30, Calyx & Corolla generated approximately $16.8 million of net revenues and gross margin of more than 50%. Calyx mails about 6 million catalogs annually and says that approximately 40% of its orders are taken online.
Vermont Teddy Bear will operate Calyx & Corolla out of its Shelburne headquarters and in a satellite office in Vero Beach.