Report: YouTube targets Vine, Instagram with new app
San Bruno, Calif. — YouTube is reportedly challenging the Vine video app from Twitter and Instagram video app from Facebook with its own new video app called MixBit. As reported by the New York Times, MixBit allows users to record up to 16 seconds of video (compared to 15 seconds for Instagram and six seconds for Vine) on their smartphones.
However, the difference comes in with the ability MixBit provides to mix and edit up to 256 individual video clips together into a video that can run up to one hour long and be shared via Twitter, Facebook, Google Plus or a new MixBit website YouTube is providing. Users can also edit publicly available video clips on the MixBit site.
The New York Times quotes YouTube co-founder Chad Hurley as saying the main point of the service is actually to encourage the remixing and resuse of existing YouTube content. MixBit videos must be released anonymously and do not allow viewers to post comments. Versions of the app for Apple and the web are reportedly available, with an Android version coming soon.
A foul mass market smell at Elizabeth Arden
Global fragrance leader Elizabeth Arden cited curtailed orders at a mass market customer as a factor in its weaker-than-expected full year financial results, and the finger was quickly pointed at Walmart.
Elizabeth Arden said sales on a constant currency basis in its fourth quarter and fiscal year ended June 30 increased 1.2% to $268 million and 9.6% to $1.35 billion, respectively. However, even when adjusted to exclude non-recurring expenses, the company posted a per share loss of 10 cents a share, compared to a prior year profit of 28 cents. For the full year, earnings per share were $2.14 compared to $2.07.
Those results were less than the company expected and Scott Beattie, Elizabeth Arden’s chairman, president and CEO, said there were two primary factors.
“The first was due to weakness at one of our largest North American mass retail customers, both in terms of retail sales performance and replenishment rate,” Beattie said. “The second factor was that our growth projections for the Elizabeth Arden brand proved to be overly optimistic given the complexity and scope of transition underway for the brand repositioning.”
Reference to one of the company’s largest mass retail customers prompted speculation that the retailer in question was Walmart. However, Beatttie was careful to distinguish between “one of” and “the” company’s largest customers. Walmart is certainly the latter and last year accounted for 13% of Elizabeth Arden’s total sales of roughly $1.24 billion. Walmart accounted for an even larger percentage of Elizabeth Arden’s business when looking only at the $778 million North American division where Walmart accounted for 20% of sales, or $155 million.
It was unclear whether curtailed orders at another of the company’s largest customers other than Walmart would have been capable of moving the needle on sales and profits to the extent it did during the fourth quarter when the situation was most pronounced. According to Elizabeth Arden, its unidentified key North American mass retail customers reduced their inventory on hand below the pace of retail sales, and the replenishment rate at account worsened significantly in the month of June, according to Beattie.
That situation, coupled with weak performance in Europe, particularly in the United Kingdom, were the primary reasons why the company fell short of fourth quarter and full year earnings expectations communicated in May.
TreeHouse Foods expands brands portfolio
OAKBROOK, Ill. — TreeHouse Foods has entered into an agreement with TorQuest Partners and other shareholders to acquire Associated Brands GP Corporation, a leading private label manufacturer of powdered drinks, specialty teas and sweeteners.
TreeHouse has agreed to pay CA$187 million (approximately U.S.$180 million) in cash for the business, subject to an adjustment for working capital.
The company expects the transaction to have a neutral effect on 2013 earnings and add approximately $0.14 to $0.16 in EPS in 2014. The transaction is expected to close in the third quarter of 2013, subject to the satisfaction of customary closing conditions, and will be financed through borrowings under TreeHouse’s existing $750 million credit facility.
TreeHouse believes its acquisition of Associated Brands will significantly strengthen its retail presence in private-label dry grocery and will introduce a line of specialty tea products to complement its fast-growing single-serve coffee business.
With approximately 650 employees, Associated Brands is headquartered in Mississauga, Ontario, Canada, and operates three production facilities in Delta, British Columbia, Canada; Medina, New York; and Toronto, Ontario, Canada. Associated Brands had sales of approximately $200 million for the 12 months ended June 30. Following the acquisition, TreeHouse will have pro forma 2013 sales of approximately $2.5 billion and adjusted EBITDA of approximately $350 million.
"We are pleased to welcome Associated Brands to our TreeHouse portfolio," said Sam K. Reed, chairman, president and CEO of TreeHouse Foods. "Associated Brands has a strong North American presence in a number of dry mix categories that are complementary to TreeHouse, such as powdered drinks, oatmeal and side dishes. Through Associated Brands, we will also enter the large and growing specialty tea category. Not only is tea recognized for its nutritional and health benefits, but it will also be a wonderful complement to our rapidly growing single serve coffee platform. We see significant opportunities to expand Associated Brands’ sales, while leveraging their strong customer relationships in both retail and industrial channels."
"We are looking forward to joining the TreeHouse family," said Scott Greenwood, president and CEO of Associated Brands. "Like us, TreeHouse is focused on partnering with its customers to develop superior products. We are focused on quality and operational expertise, we have an excellent R&D platform which allows us to be a fast follower in private label, and we are a best in class specialty tea producer with capabilities that are unmatched in the industry. We are confident that the combination will create distribution and innovation opportunities for both companies."
"We have enjoyed our partnership with Associated Brands since acquiring the company in 2007 and are proud of the progress it has made," said Eric Berke, chairman of Associated Brands and Managing Partner of TorQuest Partners. "Through this transaction, we are placing Associated Brands into the hands of an outstanding strategic buyer and will complete a successful investment on behalf of our investors."
Wells Fargo Securities, LLC is acting as financial adviser to TreeHouse on the transaction and Winston & Strawn LLP and Stikeman Elliot LP are serving as legal counsel to TreeHouse. BMO Capital Markets Corp. is serving as financial adviser to Associated Brands and TorQuest Partners with respect to the transaction and Torys LLP is serving as legal counsel to Associated Brands and TorQuest Partners.
TreeHouse is a food manufacturer servicing primarily the retail grocery and foodservice distribution channels. Its products include non-dairy powdered creamers, private-label canned soups, refrigerated and shelf stable salad dressings and sauces, powdered drink mixes and single serve hot beverages, hot cereals, macaroni and cheese, skillet dinners, Mexican sauces, jams and pie fillings, pickles and related products, aseptic sauces, and liquid non-dairy creamer.
Associated Brands is a leading North American manufacturer and supplier of private-label packaged food products that sells to almost all of the 50 largest North American food retailers. Associated Brands’ principal focus is on manufacturing dry packaged food products such as flavored drink mixes, specialty tea, hot chocolate drinks, dessert mixes, soups, bouillon, side dishes, sweeteners and oatmeal, in addition to nutritional and weight management products. Associated Brands is majority owned by TorQuest Partners, a leading Canadian private equity firm. Founded in 2002, TorQuest Partners is a Canadian-based manager of private equity funds.