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 Calyx parent company Equity Resource Partners $3.7 million in cash and stock, along with the assumption of certain working capital liabilities, for the Vero Beach, FL-based cataloger. Wellesley, MA-based investment bank Tully & Holland represented Equity Resource Partners in the deal.
Andy Williams, president of Equity Resource Partners, will serve on Vermont Teddy Bear’s board of directors as well as remain president of Calyx & Corolla. Vermont Teddy Bear will operate Calyx & Corolla out of its Shelburne headquarters and in a satellite office in Vero Beach.
Unlike most catalog industry mergers and acquisitions, this 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 & Corolla 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 net revenue of approximately $16.8 million and gross margin of more than 50%. Calyx mails about 6 million catalogs annually; about 40% of its orders are taken online.