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PrintST. LOUIS — Energizer Holdings Inc. will buy Playtex for about $1.16 billion — adding sun screen, wet wipes and sippy cups to the product line.
St. Louis-based Energizer, maker of batteries, flashlights and shaving products, is offering $18.30 per share for Playtex Products Inc., the companies said late Thursday. The price represents an 18 percent premium over Playtex’s closing stock price Thursday.
Playtex shares jumped $2.49, or 16 percent, to $18.01 in morning trading on the New York Stock Exchange. Energizer shares rose $7.06, or 6.6 percent, to $113.79.
The purchase does not include Playtex Apparel Inc., a separate company that makes bras and other apparel.
Jacqueline Burwitz, vice president of investor relations at Energizer, said no decisions have been made on whether jobs will be affected. Energizer employs 14,000 workers. Burwitz didn’t know the number of employees for Playtex. Calls to Playtex early today were not returned.
The transaction was approved unanimously by the boards of directors at both companies, Energizer said. Playtex, according federal filings, had 63.46 million shares outstanding as of April 30.
Energizer is also assuming an undisclosed amount of debt in the deal, which it said would boost the total purchase price to $1.9 billion.
Energizer is one of the world’s largest makers of batteries and flashlights. It is also the parent company of Schick-Wilkinson Sword, the second largest maker of wet shave products in the world.
“Playtex has strong consumer brands, most of which have No. 1 or No. 2 market positions, in stable or growing personal care categories,” said Energizer Chief Executive Ward Klein. “Its products enjoy healthy margins with strong, predictable cash flows, similar to our existing stable of consumer and personal care products.”
Klein said that the purchase may eventually lead to further acquisitions.
“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 said. “We also believe there are significant integration and cost reduction opportunities for the combined businesses.”
Analyst John Meara of Argent Capital in suburban St. Louis said he was surprised by the announcement, but he noted that Energizer has a track record of taking on new product lines and making it work.
“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.
Energizer also has what Meara called a “great relationship” with Wal-Mart, the world’s biggest retailer, a relationship that he said should benefit the Playtex products.
Playtex sales for its most recently reported 12 months through March totaled $641 million.
Playtex shares closed 2 percent higher at $15.52 Thursday, while Energizer’s stock rose $1.56, or 1.5 percent, to $106.73.
Westport, Conn.-based Playtex may be best known for the feminine care products that make up 35 percent of its net sales, but the company acquired Hawaiian Tropic in the spring, boosting an already substantial skin care division. Playtex owns Banana Boat sun screen, and skin care products made up 37 percent of the company’s net sales before the recent acquisition.
Neil DeFeo, chairman and chief executive officer of Playtex, said in a statement that Energizer offered a good premium over the company’s share price.
“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 said.
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