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Shares of Energizer Higher by 16% After Earlier Announcing Intent to Separate Household Products, Personal Care Divisions Into Two Publicly Traded Co.

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Energizer Holdings, Inc. (NYSE: ENR) today announced that its Board of Directors has authorized management to pursue a plan to separate the Company's Household Products and Personal Care divisions into two independent, publicly traded companies. The separation is planned as a tax-free spin-off to the Company's shareholders and is expected to be completed in the second half of the 2015 fiscal year. The separation is expected to create two strong independent public companies with distinct brands, categories and corporate strategies:

Household Products, with batteries and portable lighting products, is expected to generate strong margins and significant cash flows, and will be anchored by the universally recognized Energizer® and Eveready® brands. The Household Products division reported annual revenue of approximately $1.9 billion in the trailing twelve month period ended March 31, 2014. Personal Care is expected to be a leading pure-play consumer products company with an attractive stable of well-established brand names, including Schick® and Wilkinson Sword® in Wet Shave; Edge® and Skintimate® in shave preparation; Playtex®, Stayfree®, Carefree® and o.b.® in Feminine Care; and Banana Boat® and Hawaiian Tropic® in Sun Care. The Personal Care division had annual revenue of approximately $2.6 billion in the trailing twelve month period ended March 31, 2014, adjusted on a pro-forma basis for the feminine care acquisition. "Over the last three years, we have taken a number of important steps to enhance shareholder value, including executing a multi-year cost reduction plan, improving working capital, and initiating a dividend," said Ward M. Klein, Chief Executive Officer. "The Energizer Board of Directors and management team have continually explored opportunities to improve performance and increase long-term shareholder value and believe that separating the Household Products and Personal Care divisions is the next logical step to unlock even greater value for Energizer shareholders. Importantly, as we move through the separation process, the Company's working capital and cost reduction efforts will continue without interruption, and we expect to achieve the full savings projected."

"Since becoming an independent company in 2000, Energizer has built two successful divisions and each is now well-suited to realize its full potential on a standalone basis," Mr. Klein said. "We expect that Household Products will be well-positioned to leverage its leading brands and product portfolio to generate significant cash flows and the Personal Care business has achieved scale to be able to enhance its focus on continuing innovation and to drive top-line and market share growth."

Energizer believes that creating two public companies offers a number of benefits to the standalone businesses. Following the separation, each standalone company will be able to:

Intensify focus on its distinct commercial priorities; Allocate its own resources to meet the needs of its business; Pursue distinct capital structures and capital allocation strategies; and Provide a clear investment thesis and visibility to attract a long-term investor base suited to each business. New Household Products: A Leading Consumer Products Company with Globally Recognized Brands and Icons

We expect Household Products will create value by leveraging its leading battery and lighting brands to generate significant cash flows. Its globally recognized brands and products are sold throughout the world. Household Products is well-positioned to maintain strong market positions in its categories. It has global scale, a broad product portfolio, healthy margins, high household penetration, and its product categories remain important basket builders for retailers.

As a standalone company, we believe Household Products will be attractively positioned to:

Build market share through distribution and investment in effective category fundamentals; Drive relevant, consumer-led marketing innovation; Accelerate initiatives to optimize its global cost structure; and Generate substantial free cash flow that will enable a return of capital to shareholders. New Personal Care: Leading Pure-Play Personal Care Company with Attractive Stable of Brands

We expect Personal Care will create value by building on its track record of innovation in product development and marketing to drive top-line growth and win market share. It has a broad portfolio of leading global Wet Shave, Sun and Skin Care, Feminine Care and Infant Care products in attractive categories. Importantly, Personal Care has strong positions in large and developed markets, and its products hold #1 or #2 positions in their categories.

As an independent entity, we believe Personal Care will be able to:

Accelerate growth across all categories; Execute a focused global go-to-market strategy; Grow through disciplined strategic acquisitions; and Generate substantial free cash flow that will enable investments and capital return. Leadership

Upon completion of the separation, Ward Klein, currently Chief Executive Officer, is expected to serve as Executive Chairman of the Board of standalone Personal Care. David Hatfield, currently President and Chief Executive Officer of Energizer Personal Care, is expected to serve as Chief Executive Officer of standalone Personal Care.

J. Patrick Mulcahy, currently Chairman of the Board, is expected to serve as Executive Chairman of the Board of standalone Household Products. Alan Hoskins, currently President and Chief Executive Officer of Energizer Household Products, is expected to serve as Chief Executive Officer of standalone Household Products.

The Company plans to provide further details about the Board and management teams of the separate companies at a later date.

Next Steps

The proposed separation is subject to customary conditions, including receipt of regulatory approvals, an opinion of counsel regarding the tax-free nature of the separation, the effectiveness of a Form 10 filing with the Securities and Exchange Commission, and final approval by the Company's Board of Directors. The Company may, at any time and for any reason until the proposed separation is complete, abandon the separation or modify or change its terms.

The company has retained Goldman, Sachs & Co. as financial adviser and Wachtell, Lipton, Rosen & Katz and Bryan Cave LLP as legal counsel to advise on the separation process.

Conference Call and Investor Presentation

Energizer will host a conference call at 9:00 a.m. ET today to review the proposed separation, as well as to discuss its financial and operational results for the fiscal second quarter of 2014, which was also announced in a separate press release today. Access to the live audio webcast is available via the following link:

http://www.media-server.com/m/acs/14f9883b40dae3a938f28517d7f44e1d

The Company has posted a presentation regarding the transaction to the Company's investor relations page on its website, which is accessible via the following link:

http://phx.corporate-ir.net/phoenix.zhtml?c=124138&p=irol-presentations

 

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