Exclusive: Bain in the lead as Yankee Candle sale fizzles - sources

NEW YORK Wed May 15, 2013 6:07pm EDT

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NEW YORK (Reuters) - Bain Capital LLC has emerged as the last party standing in the race for Yankee Candle Co Inc, three people familiar with the matter said, making it likely that the largest scented candle maker in the United States will stay in private equity hands.

Final bids for Yankee Candle, currently owned by Madison Dearborn Partners LLC, are due this week and the people said on Wednesday that other buyout firms that had made first-round offers for the company, including Advent International Corp, CVC Capital Partners Ltd, Clayton, Dubilier & Rice LLC and Ares Management LLC, had lost interest.

As a result, Yankee Candle would be unlikely to fetch more than $2 billion, said the people, who spoke on condition of anonymity because the process is confidential. Madison Dearborn may decide not to sell the company for now, they added.

Yankee Candle declined to comment while representatives of the private equity firms did not immediately respond to requests for comment.

Founded in 1969, Yankee Candle sells items including scented candles, home fragrance products, car fresheners and candle accessories. Its candles are sold in North America through a wholesale network of about 35,000 store locations and 558 stores of its own, as well as online and through its catalog.

The South Deerfield, Massachusetts-based company generated net income of $56.3 million for fiscal 2012, up from $54.5 million in the prior year. It had long-term debt of $846 million and just $40 million in cash as of the end of 2012.

Yankee Candle's modest earnings growth was cited by the people familiar with the matter as one of the reasons for the auction fizzling out. The candle manufacturer may be worth 10 times its earnings before interest, tax, depreciation and amortization of around $200 million, sources previously told Reuters.

Chicago-based Madison Dearborn acquired Yankee Candle in 2006 for $1.6 billion. In its talks with Yankee Candle, Bain Capital is now dealing with an old acquaintance.

Yankee Candle's chief executive, Harlan Kent, who last year appeared on the U.S. reality TV show 'Undercover Boss' as a Yankee Candle employee in disguise, began his career in the mid-1980s at Bain & Co, the consulting firm whose partners, including former U.S. presidential candidate Mitt Romney, founded private equity firm Bain Capital in 1984.

Kent later worked for Bain Capital from 1997 to 2001 as senior vice president of global wholesale for umbrella maker Totes Isotoner Corp, which at the time was a Bain Capital portfolio company. He joined Yankee Candle in 2001 as senior vice president of the wholesale division and rose through the ranks to become CEO in 2009.

Madison Dearborn hired Barclays Capital (BARC.L) and Bank of America Merrill Lynch (BAC.N) to explore a sale of Yankee Candle, people familiar with the matter told Reuters in March.

(Reporting by Greg Roumeliotis and Olivia Oran in New York; Editing by Bernard Orr)

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