Energizer Holdings will gain Banana Boat and Hawaiian Tropic - the No. 2- and No. 4-selling sun- care brands, respectively - through its $1.9 billion purchase of Playtex Products, the companies announce July 12.

Under the firms' definitive agreement, Energizer will acquire Playtex for $18.30 per share in cash - a 26-percent premium over the stock's closing price on July 10 and its average stock price for the past 90 trading days - plus the assumption of Playtex's debt.

The transaction was approved unanimously by both companies' board of directors.

"We believe this is a great development for Playtex shareholders and employees," Playtex Chairman and CEO Neil DeFeo states.

"It represents a significant premium over our current trading price and an opportunity for our shareholders to capture the value that has been created at Playtex over the last several years."

"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," DeFeo concludes.

Playtex has product offerings in three categories - skin care, feminine care and infant care.

For the 12 months through March 2007, the firm reported sales of $641 million with earnings of $126 million before interest, taxes, depreciation and amortization.

However, those figures do not include Playtex's recent acquisition of Hawaiian Tropic sun care, which reported sales of approximately $112 million in 2006, the companies note.

Playtex acquired the Tiki Hut Holding Company, the owners of Hawaiian Tropic, for $83 million in April (¹ 'The Rose Sheet' April 23, 2007, In Brief).

For the 12 months prior to the acquisition ending March 2007, skin care represented approximately 37 percent of Playtex's sales. Feminine care accounted for 35 percent and infant care for 28 percent, the firms say.

As the parent company of Schick-Wilkinson Sword, the second largest manufacturer of wet shave products in the world, Energizer markets the Schick , Quattro and Intuition brand razors, along with a number of disposables.

The company booked sales of $3.3 billion for its most recently reported 12 months, with earnings of $607 million before interest, taxes, depreciation and amortization.

For its fiscal year 2006, Energizer's blades and razors division reported sales of $929.8 million (² 'The Rose Sheet' Nov. 6, 2006, In Brief).

Energizer CEO Ward M. Klein speaks enthusiastically about Playtex's consumer brands, which "enjoy healthy margins with strong, predictable cash flows similar to [Energizer's] existing stable of consumer and personal care products."

"We see Playtex as an exceptionally great fit with Energizer, with similar customers and distribution channels in the U.S. and Canada and the opportunity for geographic expansion in many other areas of the world where we currently do business," he says.

The exec adds that by combining the two businesses, the firms will face "significant integration and cost reduction opportunities."

Overall, "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," Klein concludes.

Energizer anticipates that the Playtex acquisition will be accretive to fiscal 2008 results.

However, due to purchase accounting requirements related to inventory valuation, the firm expects a negative impact on its first-quarter results, "with some potential to also negatively impact the second quarter."

- Melina Vissat (m.vissat@elsevier.com)

Energizer Grows Personal Care With Acquisition Of Leading Sun-Care Brands

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