Spectrum Brands Holdings is selling its Rayovac battery business to competitor Energizer Holdings as part of a transaction including Spectrum’s entire business cluster for batteries and lighting.
This $2 billion deal comes about two weeks after Spectrum had announced it would sell the Rayovac battery business in 2018. In a release, Spectrum says it will use the cash proceedings to reduce debt, reinvest in its core businesses “both organically and through bolt-on acquisitions,” and buy back shares.
“Today’s announcement is a culmination of our efforts to sell the Battery Business in order to refocus Spectrum Brands and enhance shareholder value,” said David Maura, executive chairman of Spectrum Brands Holdings. “While we have a long and proud heritage in the Battery Business, this is a key part of our reallocation of capital strategy towards a faster-growing and higher-margin Spectrum Brands.”
The stocks for both companies rose slightly with this news. At the close of the business day Tuesday, Spectrum Brands was at $125.23, up from $120.48 on Jan. 12. And Energizer Holdings was at $59.10, up from $51.62 on Jan. 12.
Spectrum’s battery and lighting business portfolio includes alkaline, carbon zinc, hearing aid and nickel metal hydride rechargeable batteries as well as battery chargers and portable lighting products.
Andreas Rouvé, Spectrum Brands Holdings CEO, says selling this business cluster will help increase focus on the company’s other areas of focus: Hardware & Home Improvement, Global Auto Care and Pet, and Home & Garden.
“We are focusing our portfolio to strengthen our business and drive long-term growth and shareholder value,” Rouvé said.
According to Alan Hoskins, CEO for St. Louis-based Energizer Holdings, buying the business from Spectrum will expand Energizer’s presence in multiple international markets, broadening its product portfolio and manufacturing capabilities. Research and development will also be expanded.
Hoskins says the acquisition represents “a compelling strategic, operational, and financial fit for Energizer.”
“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,” Hoskins added.
The acquisition is expected to close by the end of 2018.
Spectrum Brands has over 18,000 employees around the world, with about 1,200 of those in Wisconsin. The company did not immediately respond to inquiries about how the acquisition would affect jobs in the state.
–By Alex Moe