Provided exclusively by Mergermarket, an Acuris Company
Lucid Candle, a privately held manufacturer of candles, is in the process of a diversification strategy that may see it turn to M&A to enter new market segments, said Stephen Fendler, the company’s owner.
Headquartered in Armonk, a hamlet in Westchester County, New York, Lucid Candle has been supplying churches with candles ever since its founding.
Established by Clarence Almy in 1892 in New York City, CM Almy & Son started its operations as a master tailor, specializing in clergy apparel, liturgical vestments and altar cloths for local churches. In 1952, Clarence’s grandnephew, Stephen’s father, moved the New York shop to central Maine and the company expanded. As it stands, around 40,000 churches use the company’s products, according to its website.
The company is now shifting gears as it seeks to diversify its revenue streams by selling its products straight to consumers, amid rising demand for candle products, Fendler said.
Lucid Candle recently launched its first collection of home candles that use liquid paraffin, Fendler said. The next step will be to enter niche markets to tap into the growing popularity of aromatic candles, he added. This strategy will see Lucid Candle’s management take an opportunistic approach to M&A and study any opportunities that could facilitate its growth plan, he said.
Any targets would fall in the revenue range of between USD 4m to USD 10m, said Fendler, adding that deals would be funded with existing resources. At this stage, the company is not intending to hire any external advisors to handle acquisitions.
US-based producers of candles that serve market segments such as home accessories and the fashion industry would be of particular interest, he said. American producers of home fragrances and air fresheners would also be viable targets as they would fit into Lucid Candle’s diversification strategy, he added.
Suitable targets would need a robust manufacturing base and distribution network, he said, adding that exposure to the European and Australian markets would offer added value, since the company aims to start exporting its candles overseas.
Lucid Candles has been acquisitive in the past, embarking on a series of strategic deals that saw it buy small rivals and distributors to add to its production capacity and reinforce its distribution channels, said Fendler.
Fendler would not disclose the company’s financials, but said it is highly cash generative.
The American candle market is highly competitive, said Fender, who said his company holds a market share of around 35% to 40% in its area.
While the company’s owners have regularly received takeover approaches from suitors over the years, Fendler said he intends to pass ownership of the company to his son, Daniel, who is already involved in the family business on a part-time basis. Daniel will represent the sixth generation of the Fendler family to run the business, he said. Fendler’s brother, Michael, also works in the family business, as Vice President.
by Micaela Osella in New York
As seen in the mergermarket, an Acuris company, newsletter on 24/08/2017