Jefferies Analyst Excited About Jarden After Reported Waddington Acquisition

In a report published Sunday, Jefferies analyst Kevin Grundy said that Jarden Corporation

would acquire Waddington, a producer of high-end plastic cups, plates, and cutlery. He gave JAH a Buy rating and $63 price target. Jarden, a consumer products company, will likely pay $1.35 billion to Olympia Partners, Waddington's private equity owners. Bloomberg, as Grundy cited, reported that the acquisition could add up to $800 million in revenue and $150 million in profits to Jarden's operations. According to his estimates, Waddington would constitute around 10 percent of the company's pro-forma sales. He expects a 5 to 10 percent boost to FY16 EPS and an additional 0.5 percent in EBITDA margins. Grundy noted several potential synergy opportunities. For one, he said, Waddington's customer base is largely built from restaurants, caterers, and grocery stores. Grundy's team could only identify $10 million through trackable American channels, suggesting that a revenue synergy opportunity could exist with Jarden. He also believes "there should be procurement synergies in the area of plastics/resins. Grundy expects JAH to trade up as more news surrounding the acquisition is released, "based on likely accretion from the reported deal." In addition, he said that Jarden stockholders were hoping the company would return to M&A instead of pursuing share buybacks,