(CATALOG AGE) –Private equity firm Cortec Group has signed a letter of intent to buy Dr. Leonard’s Healthcare, which also mails the Carol Wright Gifts catalog, for about $200 million.
The deal should close by May, a source close to the situation said.
The letter of intent ends weeks of speculation over which private equity firm would get the Dr. Leonard’s business. The company has been owned by New York-based American Securities since Dec. 1999 when it purchased the business for $100 million.
New York-based Cortec’s offer beat out bids by fellow private equity firms Freeman Spogli, U.S. Equity Partners, and Oak Hill Capital Partners. No catalog companies were in the running.
Dr. Leonard’s president Steve Brotman declined comment. Calls to Cortec Group were not returned.
The fact that Dr. Leonard’s fetched such a high price shows that Dr. Leonard’s “is a premier property, with good growth and large operating margins,” says Mike Petsky, CEO of New York-based investment bank Petsky Prunier LLC. Many consumer catalog businesses, he points out, have been commanding four-to-six times EBITDA.
Dr. Leonard’s is based in Edison, NJ.
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