Energizer acquires Playtex for $1.9 billion

Mumbai: Consumer products giant Energizer Holdings Inc. will buy Playtex Products Inc. for about $1.16 billion. Energizer will pay a total of about $1.9 billion, including debt, for the acquisition.

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.