Energizer Holdings Buy Spectrum Brands' Batteries Business For $2 Bln Cash

Energizer Holdings, Inc. (ENR), a manufacturer of primary batteries and portable lighting products, on Tuesday said it has agreed to acquire Global Battery and Portable Lighting Business from Spectrum Brands Holdings, Inc. (SPB) for $2.0 billion in cash.

Energizer said the transaction is expected to deliver modest accretion to its 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 transaction is subject to customary closing conditions, including regulatory approvals. The acquisition is expected to close prior to the end of calendar 2018.

The portfolio of Spectrum batteries, anchored by the Varta and Rayovac brands, generated 2017 revenue and EBITDA of $866 million and $169 million, respectively.

The combination is expected to 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.

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.

In its statement, Spectrum Brands said it expects to use the net cash proceeds after tax and transaction costs to reduce debt, reinvest in its core businesses both organically and through bolt-on acquisitions, and repurchase shares.

Spectrum Brands had previously announced on January 3 that it was exploring strategic alternatives for its Global Batteries & Appliances businesses. Spectrum Brands is actively marketing its Appliances business. No assurance can be given that any transaction will result from these efforts.

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