North American party goods company Party City has entered an agreement to acquire a group that has 18 franchise stores in North Carolina and South Carolina.
The transaction carries a purchase price of $31m, representing a multiple of EBITDA of approximately 4.6 times, and the fully synergised multiple is expected to be about four times.
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Last year, this franchise operator generated sales of nearly $44m.
Before this acquisition, Party City retail operations comprised 765 own stores and 164 franchise stores.
Party City CEO James M Harrison said: “This latest franchise acquisition expands our footprint in the Carolinas and provides us with an opportunity to strengthen the brand integrity of these locations and to explore opening additional company-owned stores in this market over time.
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“We will continue to evaluate accretive franchise acquisitions going forward in order to expand our company-owned footprint, improve the operational efficiencies of these stores and enhance the customer experience.”
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By GlobalDataParty City is a speciality store that offers variety of party supplies, balloons and costumes.
The company designs, manufactures and distributes paper and plastic tableware, metallic and latex balloons, Halloween and other costumes, accessories, novelties, gifts and other stationery.
It has more than 900 stores in North America, including 150 franchise stores. Party City also operates through its website.
