News-Antique.com - Nov 30,-0001 - July 21, 2005--Brown-Forman Corporation (NYSE: BFA) (NYSE: BFB) Chairman and Chief Executive Officer Owsley Brown II announced today that the company has completed the strategic review of Lenox, Incorporated, a wholly-owned subsidiary company. As a result, Brown-Forman has agreed to sell substantially all of Lenox, Incorporated to Department 56 for $190 million.
Founded in 1976, Department 56 (NYSE: DFS) is a designer, distributor, wholesaler, and retailer of fine quality collectibles and other giftware products sold through gift, home accessory and specialty retailers, department stores, and general merchandise chains, as well as through its own stores and consumer-direct home show sales business. Department 56's principal offices are located in Eden Prairie, MN, near Minneapolis. It has flagship stores in Bloomington, Minnesota; Las Vegas; San Francisco; Chicago; Orlando; and at Disneyland in California.
Lenox, founded in 1889 in Trenton, New Jersey and purchased by Brown-Forman in 1983, manufactures and markets leading brands in several consumer product categories, including Lenox fine china, crystal, collectibles, and giftware; Dansk contemporary tableware and giftware; Gorham silver, crystal and china; and Kirk Stieff silver and pewter products.
In February, Brown-Forman announced it was exploring strategic alternatives for Lenox, including a possible sale. During this process, the company considered a range of alternatives but ultimately concluded that selling the business was in the best interest of Brown-Forman shareholders.
"The environment for this business has been challenging for several years as evidenced by the weakness throughout the U.S. tabletop and giftware industry," stated Brown. "We believe Department 56 is very well positioned to focus exclusively on and grow this outstanding portfolio of brands."
Brown-Forman undertook a competitive bidding process that attracted broad-based interest from both financial and strategic buyers. "The great interest many firms had in Lenox is a testament to the quality of its brand names, products, and people, as well as to the opportunities that a combined firm will bring. Given the difficult competitive environment for this industry and our robust auction process, we believe Brown-Forman has received an attractive price and terms for Lenox. The sale will enable Brown-Forman to concentrate its energies even further on our highly successful global beverage alcohol business," stated Brown.
The full year effect of the transaction is projected to be a net $0.18 per share reduction in the company's fiscal 2006 income. This is comprised of a first quarter non-cash impairment charge and fees related to the transaction estimated to be $0.31 per share, partially offset by an anticipated $0.13 per share gain associated with the curtailment of post-retirement benefit plans that will be recorded when the transaction closes.
Brown-Forman will retain ownership of the Lenox headquarters property and building located in Lawrenceville, New Jersey and Lenox's Brooks & Bentley subsidiary in the United Kingdom. Brown-Forman is continuing its strategic review of Brooks & Bentley in a separate process and plans to sell the Lawrenceville property.
The transaction, which is subject to regulatory clearance in the U.S., financing, and customary closing requirements, is expected to conclude in six to eight