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Energizer to split up personal care, household businesses
April 30th, 2014
ST. LOUIS – Energizer Holdings Inc. plans to spin off its household products and personal care divisions into two independent, public companies.
The company said Wednesday that the split will create two strong players with distinct brands, categories and corporate strategies: Household Products, with batteries and portable lighting products and anchored by the Energizer and Eveready brands, and Personal Care, a pure-play consumer products company with such well-established brands as Schick, Wilkinson Sword, Edge and Skintimate in shaving products; Playtex, Stayfree, Carefree and o.b. in feminine care; and Banana Boat and Hawaiian Tropic in sun care.
The Household Products unit had revenue of about $1.9 billion in the trailing 12 months ended March 31, and the Personal Care unit had sales of about $2.6 billion in that period, according to Energizer.
"Over the last three years, we have taken a number of important steps to enhance shareholder value, including executing a multiyear cost reduction plan, improving working capital, and initiating a dividend," stated Ward Klein, chief executive officer of Energizer Holdings. "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."
Energizer said the separation is planned as a tax-free spin-off to shareholders and is slated to be completed in the second half of fiscal 2015.
"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 stand-alone basis," Mr. Klein noted. "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."
Once the spin-off is completed, plans call for Klein to serve as executive chairman of the Personal Care business and for David Hatfield, currently president and CEO of Energizer Personal Care, to become CEO of the Personal Care company.
J. Patrick Mulcahy, currently Energizer Holdings chairman, is expected to serve as executive chairman of the Household Products business, with that division's current president and CEO, Alan Hoskins, taking on the CEO role for the new stand-alone company.