Energizer's $1.2 billion deal to acquire Playtex Products
Parent of the ever-running bunny will expand its line of personal products. Bras and apparel not included.
ST. LOUIS - The Energizer Bunny is taking on skin-care products, wet wipes, and sippy cups. Energizer Holdings Inc., known for its infinitely running bunny, will buy Playtex Products Inc. for $1.16 billion as it expands its portfolio of personal-care products.
Investors liked the news: Playtex shares soared 15.8 percent, or $2.45, to $17.97. Energizer shares rose almost 1 percent, or 94 cents, to $107.67.
St. Louis-based Energizer is offering $18.30 per share for Playtex Products Inc., the companies said in announcing the deal late Thursday. The price represents an 18 percent premium over Playtex's closing stock price Thursday.
Playtex, based in Westport, Conn., may be best-known for the feminine-care products that make up 35 percent of its net sales, but it acquired Hawaiian Tropic in the spring, boosting an already substantial skin-care division. Playtex owns Banana Boat sunscreen, and skin-care products made up 37 percent of net sales before the recent acquisition.
Energizer's purchase of Playtex does not include Playtex Apparel Inc., a separate company that makes bras and other apparel.
The announcement was a surprise to some analysts, much like the 2003 deal when Energizer - among the world's largest makers of flashlights and batteries - purchased Schick-Wilkinson Sword, the world's second-largest maker of wet-shave products.
That worked out well. Energizer chief executive officer Ward M. Klein said yesterday that Schick's annual sales of $625 million at the time of the purchase have grown to nearly $1 billion. And he expects Playtex to be a good fit with the Schick line, taking personal-care products from less than one-third of total corporate sales to more than 40 percent, based on 2006 figures.
Analyst John Meara of Argent Capital in suburban St. Louis noted Energizer's strong working relationship with Wal-Mart Stores Inc., the world's largest retailer, a relationship he said would benefit the Playtex products.
"When they bought Schick, there was substantial execution risk, going after a big competitor. And what did they know about the razor business? But they made me a believer. They've done a great job," Meara said.
Klein said Energizer sees "significant integration and cost-reduction opportunities," but declined to say if jobs would be affected. Energizer employs 14,000 workers. Playtex has 1,800 employees.
Energizer is also assuming an undisclosed amount of debt, which it said would boost total purchase price to $1.9 billion.
Playtex sales for its most recently reported 12 months through March 2007 totaled $641 million.