US-based party goods retailer Party City Holdco has signed an agreement to purchase a master franchise group operating 16 stores in Pennsylvania.
The value of the transaction is around $18.8m and represents a fully synergised multiple of EBITDA of approximately four times. The franchise operator reported sales of approximately $34m last year.
The transaction will also expand Party City’s retail operations to 814 company-owned stores, as well as 134 franchised stores.
Party City chief executive officer James M Harrison said: “The acquisition of these 16 franchise group locations will solidify our position in Pennsylvania, where we now have a total of 30 company-owned stores.
“Accretive franchise acquisitions remain an integral part of our strategy to systematically increase our retail square footage, expand our presence in attractive, under-represented markets and deliver value for our shareholders.”
In March, Party City agreed to acquire 11 franchise stores in Maryland from a franchise group for approximately $14m.
The retailer also signed an agreement to acquire 18 franchise stores in North Carolina and South Carolina for $31m.
The party goods retailer currently operates approximately 950 speciality retail party supply stores across North America under various banner names such as Party City and Halloween City, as well as an e-commerce website, PartyCity.com.
The company offers a range of party goods to customers such as paper and plastic tableware, metallic and latex balloons, costumes, accessories, novelties, gifts and stationery across the world.