Party City Holdco buys 18 franchise stores in the Carolinas
Party City Holdco Inc. (NYSE:PRTY), the leading vertically integrated party goods company in North America, announced that it has entered into an agreement to acquire a master franchise group representing 18 franchise stores in North Carolina and South Carolina.
The purchase price of $31 million represents a multiple of EBITDA of approximately 4.6 times, and the fully synergized multiple is expected to be about four times. In 2016, this franchise operator reported sales of approximately $44 million. Prior to this acquisition, the company’s retail operations included 765 company-owned Party City stores and 164 franchise stores.
James M. Harrison, Chief Executive Officer, 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. 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.”
The transaction is just the latest in a string of acquisitions for Party City Holdco. In January, it acquired 18 Party City franchises in the states of Alabama, Florida, Louisiana and Mississippi. Party City Holdco also purchased distribution companies in Australia and Mexico earlier this year.