Multi-title cataloger Potpourri Holdings Inc. said this week that it has been acquired by private equity firm Linsalata Capital Partners, Mayfield Heights, OH, and members of Potpourri's management team for an undisclosed sum.
Potpourri Holdings, Medfield, MA, had been a portfolio investment of HIG Capital, Miami.
Potpourri's executive management team, including president/CEO Jack Rosenfeld, a 30-year veteran of the direct marketing industry, will remain in their current roles with the company. Rosenfeld also will maintain an equity stake in the firm.
“We are looking at two acquisitions right now, which, if we were to complete them, would close in early '03,” Rosenfeld said. “Linsalata will provide what HIG provided, which is tremendous deal expertise. Linsalata will be instrumental in the company continuing its strategy of growth through acquisition. These private equity firms bring a lot of valuation and financing expertise. And Linsalata has money to put to work.”
Potpourri Holdings, which has annual revenue of more than $120 million, is a direct marketer of consumer products in categories such as personal gift, home decor, casual apparel, jewelry and craft markets. The company manages 10 titles — Catalog Favorites, Potpourri, Expressions, Serengeti, The Pyramid Collection, In the Company of Dogs, Back in the Saddle, NorthStyle, The Stitchery and Nature's Jewelry — and mails more than 90 million catalogs annually.
Potpouri and Catalog Favorites are the two biggest sales generators with 21 percent and 18 percent of revenue respectively.
Seven of the titles have been acquired since 1998 when HIG and Rosenfeld bought the company and obtained a majority interest in the operation, while Potpourri, Expressions and The Stitchery were already part of the operation in 1998.
Eight of the titles will produce revenue growth this year, Rosenfeld said, and the company's overall revenue growth is projected at more than 15 percent for 2002, with an even greater percentage growth projected in terms of profit. Growth was described as flat this year for The Stitchery.
He described the company's marketing formula as including a focus on a mature mid- to upper-income female consumer as well as mailing multiple titles to the same house file names.
“Since it's all the same demographic, it's all very synergistic,” he said.