Spectrum Brands Holdings Inc (SPB)

[Enterprising Investor]

Energizer Holdings, Inc. Announces Agreement To Acquire Spectrum Brands Holdings' Global Battery And Portable Lighting Business (1/16/18)

- Adds Well Recognized Varta® and Rayovac® Brands to Energizer's Portfolio

- Improves Our Competiveness Globally through Addition of Complementary Geographies in Europe and Latin America

- Accretive to Adjusted Earnings per Share and Free Cash Flow in the First Full Fiscal Year, Excluding One-Time Transaction and Integration Costs

ST. LOUIS, Jan. 16, 2018 /PRNewswire/ -- Energizer Holdings, Inc. (NYSE: ENR) today announced that it has entered into a definitive agreement to acquire Spectrum Brands' (NYSE: SPB) Global Battery and Portable Lighting Business ("Spectrum Batteries") for $2.0 billion in cash. Anchored by the Varta® and Rayovac® brands, the portfolio has a longstanding history, global footprint and diversified range of products including alkaline, carbon zinc, hearing aid and nickel metal hydride rechargeable batteries as well as battery chargers and portable lighting products.

The combination will expand Energizer's presence in a number of international markets, broaden Energizer's product portfolio and manufacturing capabilities, and increase capacity for research and development. This will enable consumers to benefit from accelerated innovation and a wider range of products, and provide the opportunity to drive cost efficiencies to enhance the Company's ability to compete in the category.

Spectrum Batteries generated 2017 revenue and EBITDA of $866 million and $169 million, respectively. The acquisition price represents a transaction multiple of 7.5 times Fiscal 2017 EBITDA, net of tax benefits with a net present value of approximately $100 million and including estimated run-rate synergies of $80 to $100 million and the costs to achieve. The transaction is expected to deliver modest accretion to Energizer's adjusted earnings per share and free cash flow in the first year, excluding one-time transaction and integration costs, and will achieve additional favorable accretive impacts following our realization of targeted synergies.

"The acquisition of Spectrum Batteries represents a compelling strategic, operational, and financial fit for Energizer," said Alan R. Hoskins, Chief Executive Officer of Energizer. "The combination will enable us to leverage Spectrum Brands' manufacturing assets, significantly expand our international business and enhance our long-term brand building capabilities as we broaden our portfolio with the Varta and Rayovac brands and our geographies with Spectrum Batteries' passionate global colleagues. We have great respect for Spectrum Batteries and the strong business its colleagues have built, and are excited to bring together the talented colleagues from around the globe from both organizations to drive our business to new heights. In addition, the top-line and free cash flow growth from this acquisition, combined with the opportunity to realize meaningful synergies, will further enhance our ability to drive long-term shareholder value."

Energizer intends to fund the acquisition through a combination of existing cash and committed debt facilities, expected to consist of a new term loan and senior notes. In addition, Energizer intends to maintain its existing senior notes, maturing in 2025.

The transaction is subject to customary closing conditions, including regulatory approvals. The acquisition is expected to close prior to the end of calendar 2018.

Barclays acted as exclusive financial advisor and King & Spalding acted as legal counsel to Energizer on the transaction. Barclays and J.P. Morgan have committed to provide financing for the transaction.

Conference Call and Webcast Information:

In conjunction with this announcement, Energizer will hold an investor conference call and webcast beginning at 8:30 a.m. eastern time today to discuss the transaction. The call may be accessed by dialing 1-844-492-3730 about 10 minutes before the start of the call. International callers may dial 1-412-542-4197. Please ask to join Energizer Holdings, Inc.'s call. A slide presentation will accompany the call and can be accessed from the Investors section of the Company's website, www.energizerholdings.com, under "Investors" and "Events and Presentations" tabs. In addition, the call will be webcast on www.energizerholdings.com and can be accessed via the following link:

https://www.webcaster4.com/Webcast/Page/1192/24184

https://www.prnewswire.com/news-releases/energizer-holdings-inc-announces-agreement-to-acquire-spectrum-brands-holdings-global-battery-and-portable-lighting-business-300582783.html