Energizer acquires Playtex for $1.9 billion
17 Jul 2007
Energizer has agreed to pay shareholders $1.16 billion, or $18.30 per share in cash, which represents an 18 per cent premium to Playtex''s July 12 closing price of $15.52.
Energizer
is also assuming an undisclosed amount of debt in the
deal, which it said would boost the total purchase price
to $1.9 billion.
St. Louis-based Energizer makes batteries, flashlights
and shaving products. Energizer is also the parent company
of Schick-Wilkinson Sword, the second-largest manufacturer
of wet shave products in the world.
Energizer plans to merge the new acquisition with its
Schick Wilkinson Sword division later this year.
Westport, Conn.-based Playtex produces Hawaiian Tropic
and Banana Boad sun screen, and Wet One wipes. Playtex
also has a stronger portfolio of women''s personal products
that go head-to-head with P&G.
Energizer''s lineup includes women''s Schick razors while
Playtex''s core brands include its namesake tampons and
infant-care items.
P&G sells Gillette razors and Tampax tampons among
several other products for women. Energizer''s namesake
batteries also compete against Duracell, which P&G
picked up when it bought Gillette.
"For our employees, it means becoming a part of
a much larger consumer products business with the scale
and resources to thrive in an increasingly competitive
environment," Neil DeFeo, chairman and chief executive
officer of Playtex, said in a statement.
Playtex has been under pressure to sell the company
from a large shareholder who opposed the company''s strategy
of growth through acquisitions.
Harbinger Capital Partners, which has a 19.8-per cent
stake in Playtex, said in a February filing with the
Securities and Exchange Commission it believed "the
execution risk, inevitable increase in leverage and
the need to learn new markets associated with the plan
to make a significant acquisition internationally, is
not in the best interest of shareholders."
Energizer
chief executive Ward Klein said the purchase of Playtex
is "an exceptionally great fit," giving the
company an opportunity for worldwide expansion. "Energizer
will emerge with a more diversified portfolio of products,
and greater scale in the personal-care category, which
will now be more evenly balanced with our household
goods business. It will also provide a platform for
possible additional value-adding acquisitions,"
he said in a statement.